First-Time Homebuyer Programs in Austin, TX
Navigating Austin’s rapidly growing real estate market can be daunting for first-time homebuyers, especially those with limited income or savings.
Fortunately, the region offers a wide range of grants, forgivable loans, and tax credit programs designed to bridge financial gaps and make homeownership more attainable.
Whether you’re a teacher, a first responder, or simply looking to buy a starter home, this comprehensive guide covers everything you need to know about eligibility criteria, application steps, and program benefits.
Discover how to improve your credit, save effectively, and leverage the best resources available to achieve your dream of owning an Austin home.
In November 2024, the median home price in Austin hovered around $550,000 (according to Realtor.com). High prices are partially driven by continued job growth, tech industry expansion, and a steady influx of newcomers. For local residents—especially low- to moderate-income buyers—these prices can seem insurmountable.
That’s why first-time homebuyer programs play such a crucial role. They help bridge financial gaps through grants, forgivable loans, and tax credits, enabling you to cover down payments, closing costs, and even reduce monthly mortgage burdens.
Tip: Before diving into any specific program, get a handle on your own financial picture: credit score, monthly budget, and potential down payment amount. Pre-approval from a lender gives you a stronger bargaining position in Austin’s competitive market.
Key Local and Statewide First-Time Homebuyer Programs
Below, you’ll find the most recent and relevant programs, including local Austin-focused assistance, Travis County options, and statewide resources offered through the Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA).
Workforce Initiatives for Safe Housing (WISH) Grant
The WISH Grant, facilitated by the Premier America Credit Union, can provide up to $27,500 in assistance. This is a popular option for certain workforce professions—such as teachers, healthcare workers, and public safety employees—who earn at or below 80% of the Area Median Income (AMI).
• Eligibility Example: For a single-person household, 80% AMI in Austin is about $73,750 (but always confirm the latest figures).
• How It Works: The grant matches $4 for every $1 you contribute, up to $7,700 of your own funds. If you invest $6,000, for example, your total grant could reach $24,000.
• Advantages: No repayment required, and funds can be used toward both down payments and closing costs.
Application Steps:
Confirm your profession qualifies (teacher, healthcare, public safety, etc.).
Contact a participating lender who offers the WISH Grant.
Complete a HUD-approved homebuyer education course.
Provide proof of income and employment details for final approval.
Case Study
Sarah, a Teacher in Austin, saved $5,000 for her down payment but still needed more to close on a $400,000 home. By leveraging the WISH Grant, she received an additional $20,000 in matching funds. Today, she’s a proud homeowner in a Southeast Austin neighborhood, all without draining her entire savings.
Austin Down Payment Assistance (DPA) Program
The Austin Down Payment Assistance Program offers up to $40,000 in a 0%-interest, forgivable loan for eligible first-time buyers purchasing within the city’s Full Purpose limits. After five years of continuous occupancy as a primary residence, the loan is fully forgiven.
Key Eligibility Requirements:
• No homeownership in the past three years.
• Household income at or below 80% of AMI.
• Sales price limit of $579,025.
• Completion of a HUD-approved homebuyer education course.
Application Steps:
Check if the property is within Austin’s Full Purpose jurisdiction using the city’s Jurisdictions Web Map.
Get pre-approved by a participating lender.
Submit a DPA application along with financial documentation (e.g., six months of bank statements, tax returns).
Why It’s Ideal
The five-year forgiveness period is relatively short. If you intend to stay in Austin, this program is an excellent pathway to building equity quickly without long-term financial strings attached.
Travis County Hill Country Home DPA Program
The Hill Country Home Down Payment Assistance (DPA) Program is great for those targeting homes in Travis County but outside Austin’s Full Purpose city limits. It provides 4% to 6% of your mortgage loan amount in the form of a 0%-interest, 10-year forgivable second mortgage.
• Maximum Purchase Price: $364,452
• Income Limit: Up to 140% of AMI ($138,460 for a single-person household, though this can vary)
• Compatible with FHA, VA, USDA, or Freddie Mac HFA Advantage loans
How to Apply:
Contact a participating lender to confirm eligibility and gather required documents (credit score, DTI ratio, income verification).
Complete any mandatory homebuyer education courses.
Finalize your mortgage and second-lien paperwork at closing.
Benefit
The forgiveness period is 10 years, but there’s no strict residency requirement after the funds are forgiven. If you’re a repeat buyer or have a higher income, this could be a stronger option than other programs restricted to 80% AMI.
Texas State Affordable Housing Corporation (TSAHC) Programs
TSAHC offers two prominent statewide programs that Austin buyers can leverage:
• Homes for Texas Heroes: Reserved for teachers, firefighters, police officers, EMS personnel, and veterans. Provides up to 5% of the loan amount for down payment and closing costs, either as a grant or a forgivable second-lien loan.
• Home Sweet Texas Home Loan Program: Open to both first-time and repeat buyers who meet income and purchase price limits. Also offers up to 5% in assistance.
Both programs often require a minimum credit score of 620 and completion of a homebuyer education course. They can also be paired with a Mortgage Credit Certificate (MCC), giving you a tax credit of up to 20% of your annual mortgage interest.
Pro Tip:
Start by taking TSAHC’s online Eligibility Quiz to see which program aligns with your profession, credit score, and income.
Other State and Federal Loans
• FHA (Federal Housing Administration) Loans: Require as little as 3.5% down if your credit score is 580 or above. You can often combine an FHA loan with local Austin DPA programs.
• USDA Loans: Perfect if you’re eyeing a more rural area around Austin’s outskirts. USDA loans can offer zero down payment for low- to moderate-income households.
• Freddie Mac Home Possible & Fannie Mae HomeReady: Conventional loan products for low-income buyers requiring as little as 3% down. These can sometimes be paired with grants or assistance programs for closing costs.
Detailed Comparison of Austin’s Homebuyer Programs
| Program | Assistance Amount | Type | Income Limit | Purchase Price Limit | Forgiveness Period |
|---|---|---|---|---|---|
| WISH Grant | Up to $27,500 | Non-repayable grant | 80% AMI | $579,025 | None |
| Austin DPA | Up to $40,000 | 0%-interest forgivable loan | 80% AMI | $579,025 | 5 years |
| Travis County Hill Country DPA | 4%–6% of loan | 0%-interest forgivable second mortgage | 140% AMI | $364,452 | 10 years |
| TSAHC Heroes/Home Sweet | Up to 5% of loan | Grant or forgivable second loan | Varies by county | $359,460–$429,340 | 3 years if second loan |
Supplementary Resources for Austin Homebuyers
Homebuyer Education Courses
Many of these programs require completion of a HUD-approved homebuyer education course. In Austin, popular providers include Business & Community Lenders (BCL) of Texas and Frameworks CDC. These courses typically cost between $50 and $100 and cover mortgage basics, budget planning, credit building, and home maintenance. You’ll receive a completion certificate to submit with your assistance application.
Community Land Trust (CLT) Program
Austin’s Community Land Trust (CLT) helps make homes more affordable by selling the house but leasing the land under it to the homeowner at a minimal cost. This arrangement keeps long-term housing costs lower. If you sell, the resale price is often capped to maintain affordability for future buyers.
Mortgage Credit Certificate (MCC)
Administered by TSAHC and the Texas Department of Housing and Community Affairs (TDHCA), the MCC offers a federal tax credit of up to 20% of your annual mortgage interest, potentially saving you thousands of dollars over the life of your loan. It can be paired with certain down payment assistance programs for maximum benefit.
Income Limits: How They Affect Your Eligibility
Income limits dictate whether you can qualify for these programs. AMI (Area Median Income) adjusts yearly and depends on household size. Here’s a snapshot for 2025, though you should confirm exact figures with official sources:
| Household Size | 80% AMI (Max Income) |
|---|---|
| 1 | $73,750 |
| 2 | $84,250 |
| 3 | $94,800 |
| 4 | $105,300 |
| 5 | $113,750 |
Note that Travis County’s Hill Country DPA program uses 140% AMI instead of 80%. Always verify the latest income thresholds directly with lenders or program administrators.
Actionable Tips to Strengthen Your Application
Improve Your Credit Score
• Pay bills on time and reduce credit card balances.
• Check your credit report for errors at AnnualCreditReport.com.
• Avoid new credit inquiries before applying for a mortgage.
Save for a Down Payment
• Set up automatic monthly transfers into a dedicated savings account.
• Look for side gigs or part-time work temporarily to boost savings.
• Consider state and federal tax refunds or work bonuses as a jumpstart for your fund.
Find Affordable Homes in Austin
• Focus on emerging neighborhoods or areas just outside the city’s center.
• Work with a realtor who specializes in down payment assistance and affordability.
• Check listings at local housing nonprofits or city-sponsored affordable housing sites.
Navigate Austin’s Competitive Market
• Get pre-approved early to show sellers you’re serious.
• Be flexible with closing dates or leasebacks if the seller needs more time.
• Offer earnest money or option fees to demonstrate commitment.
How to Choose the Best Program for Your Situation
• Low-Income Buyers: Austin’s DPA or WISH Grant are excellent fits if you’re under 80% AMI.
• Moderate-Income Buyers: Travis County Hill Country DPA or TSAHC’s Home Sweet Texas can accommodate higher income thresholds.
• Specific Professions: Teachers, police officers, firefighters, and healthcare workers often qualify for WISH or TSAHC Heroes programs.
• Rural/Outskirts: USDA loans may allow for zero down payment in approved areas near Austin.
• Veterans: VA loans require no down payment and can be paired with TSAHC or other local assistance.
Always compare interest rates, forgiveness periods, and residency requirements before committing. Sometimes, a slightly lower assistance amount but a shorter forgiveness term can be more financially advantageous in the long run.
The Bottom Line
Securing a home in Austin doesn’t have to be a pipe dream, even if you’re a low- or moderate-income earner. By leveraging local grants like the WISH Grant or Austin DPA, or tapping into broader programs such as TSAHC and Hill Country DPA, you can overcome common financial hurdles.
Pair these tools with strong financial habits—improving your credit, saving diligently, and working with knowledgeable professionals—and you’ll be well on your way to homeownership in Austin’s competitive market.
Ready to take the next step? Reach out to a participating lender, sign up for a homebuyer education course, or consult with a local real estate agent who specializes in first-time homebuyer assistance. With the right guidance and resources, you can become a homeowner sooner than you ever imagined.
Frequently Asked Questions
1. What is the maximum down payment assistance available to first-time homebuyers in Austin?
Eligible first-time homebuyers in Austin can receive up to $40,000 in down payment and closing cost assistance through the city's Down Payment Assistance Program (DPA).
2. Who qualifies as a first-time homebuyer in Austin?
A first-time homebuyer is someone who hasn’t owned a home in the past three years. Certain exceptions apply, including displaced homemakers and single parents.
3. What are the income limits for Austin’s DPA program?
Income limits are based on 80% of the area’s Median Family Income. For example, a four-person household must earn $97,800 or less to qualify.
4. Is homebuyer education required to receive assistance?
Yes. Applicants must complete a HUD-approved homebuyer education course to be eligible for Austin’s down payment assistance.
5. What types of properties are eligible under Austin’s DPA program?
Eligible properties include single-family homes, townhomes, and condos located within the City of Austin’s full-purpose jurisdiction.
6. Are there credit score requirements for Austin’s DPA program?
While the city doesn’t set a minimum score, most participating lenders require a credit score of at least 620. You can check requirements at the TSAHC site.
7. What is the process to apply for Austin’s DPA program?
You must complete a homebuyer course, get pre-approved with a participating lender, and have that lender submit your application to the city.
8. Are there other assistance programs available in Austin?
Yes, programs like the Texas State Affordable Housing Corporation offer grants and fixed-rate loans for low and moderate-income buyers.
9. Can I combine Austin’s DPA with other assistance programs?
In some cases, yes. Combining programs depends on lender compatibility and guidelines, so consult your lender directly.
10. Where can I find more information or start the application process?
You can find eligibility info, program details, and application steps on the City of Austin’s official homebuyer page.
