Texas Down Payment Assistance: Is It Free Money?
By John “JT” Terry, Mortgage Loan Originator, NMLS #2598209 · Published and updated November 13, 2026.
Texas down payment assistance is not automatically free money. The specific agreement determines whether you receive a grant, a repayable loan or assistance that can be forgiven after you meet its conditions.
For a Texas homebuyer, the practical question is: what will this help cost me today, each month, and if my plans change?
Know which organization operates the program
The Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation are separate organizations. Do not assume a program described under one belongs to the other.
TDHCA lists My First Texas Home and My Choice Texas Home. Its public overview distinguishes first-time-buyer requirements and exceptions and says approved homebuyer education is required for assistance. TDHCA program overview.
Success Mortgage Partners, Inc. appears on TDHCA's published list of participating lenders, so Cat & JT can review My First Texas Home and My Choice Texas Home with you. Being a participating lender is not an approval; program eligibility, funding and underwriting still apply.
TSAHC also maintains homebuyer program information. Use its official resources to check the current options and participating lenders. TSAHC homebuyer overview.
Compare the obligation, not just the upfront benefit
TDHCA’s lender guide describes both deferred repayable and deferred forgivable second-lien options. The current rate notice and applicable loan documents determine what is available for a particular transaction. TDHCA lender guide.
Before choosing an option, ask the lender to identify these items in writing:
The assistance amount and eligible uses.
Whether a lien or separate repayment agreement is involved.
The events that require repayment.
Any conditions that must be met for forgiveness.
The first mortgage’s rate, fees, mortgage insurance, and full payment.
If the lender says the assistance is a grant, ask for the document that establishes its terms. If it is a forgivable loan, ask what happens before forgiveness is complete.
Run a “plans changed” check
Imagine that a job change means you need to move sooner than expected. Or that refinancing becomes attractive. Would either event create an assistance repayment obligation? Ask the lender to walk through those possibilities using the exact program documents.
Then compare an assisted mortgage with an otherwise available mortgage without assistance. Receiving more help at closing is useful, but it should be weighed alongside the monthly cost and any continuing obligation. You do not need to predict the future perfectly; you need to understand the agreement you are signing.
Keep your property budget in the conversation
Assistance addresses part of the purchase expense. It does not remove the need to budget for taxes, insurance, maintenance, and any association costs. Ask for a property-specific estimate before deciding that a loan fits your budget.
Grant, deferred loan, or forgivable loan: three different promises
Assistance structure | What to check before accepting |
|---|---|
Grant | Whether the written agreement imposes conditions or a recovery obligation |
Deferred repayable loan | When the balance becomes due, even if no monthly payment is collected |
Forgivable loan | The required ownership or occupancy period and events that stop forgiveness |
TDHCA's My First Texas Home is aimed at first-time buyers, with specified exceptions; My Choice Texas Home does not require first-time-buyer status. TDHCA also requires approved homebuyer education for its assistance. TDHCA program descriptions.
For a North Texas purchase, use the property's county and household details to identify the applicable income and purchase-price limits. Comparing a Texas home with an Oklahoma home requires separate assistance and tax assumptions.
Frequently asked borrower questions
Is Texas down payment assistance free money?
Not necessarily. A grant, a deferred repayable loan and a forgivable loan create different obligations. Read the agreement instead of relying on the word “assistance.”
Can a repeat buyer get Texas assistance?
Some programs serve repeat buyers. TDHCA identifies My Choice Texas Home as an option that does not require first-time-buyer status. Other eligibility requirements and current availability still apply.
Will I owe money if I refinance?
Possibly. Refinancing, selling or changing occupancy can affect assistance obligations. Have the lender identify the exact provision and remaining balance before you sign or later refinance.
How should I compare an assisted loan?
Request the first mortgage and assistance together: cash required now, complete monthly payment, fees and any future repayment. Compare that package with an available option without assistance.
General mortgage education. Program availability, funding and underwriting require current verification. This is not a commitment to lend or a promise of assistance.
Talk through your purchase with Cat & JT
Cat & JT powered by Success Mortgage Partners are based in Ardmore, Oklahoma, serving Oklahoma, Texas, Kansas and Missouri. For a conversation about your purchase plans, contact Cat Terry, NMLS #1140038, or John “JT” Terry, NMLS #2598209, at 580-226-4282 or through the contact page. Use a secure channel for private financial records.
Powered by Success Mortgage Partners, Inc., NMLS #130562 · Equal Housing Lender · Not affiliated with any government agency. NMLS Consumer Access.
