My First Texas Home Program: A Guide for Austin First-Time Homebuyers
The My First Texas Home program, offered by the Texas Department of Housing and Community Affairs (TDHCA), provides first-time homebuyers in Austin, TX, with a 30-year fixed-rate mortgage and up to 5% in down payment assistance (DPA).
In a city where median home prices are approximately $500,000 in 2025, this program helps low-to-moderate income households overcome financial barriers to homeownership. Eligible buyers can access interest-free DPA and a Mortgage Credit Certificate (MCC) for tax savings, making it a robust option for navigating Austin’s competitive housing market.
This guide details the program’s eligibility, benefits, application process, and strategies for success, offering a clear path for prospective homeowners.
Key Takeaways
- My First Texas Home offers up to 5% in down payment assistance as a forgivable second lien or grant, depending on the loan type.
- Applicants must complete a TDHCA-approved education course, typically online, before submitting their loan application.
- Income and credit limits apply—most lenders require at least a 620 credit score and income under 115% of the area median.
- Program participation is only available through TDHCA-approved lenders, who also manage the loan and DPA paperwork.
- Stacking My First Texas Home with local programs like the City of Austin DPA can reduce total cash to close.
- Preparation is key—gather documents and secure pre-approval early to compete in Austin’s fast-paced housing market.
Austin’s real estate market remains challenging, with high demand and limited affordable inventory, though a slight price dip of 2.3% in Q1 2025 provides some relief. '
The My First Texas Home program addresses key obstacles, such as saving for a down payment, by offering flexible loan options and financial assistance.
Designed for first-time buyers or those who haven’t owned a home in three years, it supports a range of mortgage types, including FHA, VA, and USDA loans. Below, the program’s features, requirements, and practical steps are outlined to assist Austin residents in achieving homeownership.
Overview of the My First Texas Home Program
The My First Texas Home program, administered by TDHCA, combines a low-interest, 30-year fixed-rate mortgage with up to 5% of the loan amount in DPA, available as a grant or interest-free second lien loan. The program is accessible statewide, including in Austin, and targets first-time homebuyers or honorably discharged Veterans and Military, as defined by TDHCA. The DPA can cover down payments or closing costs, reducing upfront expenses in a market where a 3–20% down payment on a $500,000 home equates to $15,000–$100,000.
- Provides up to 5% of the loan amount in DPA, equating to $25,000 on a $500,000 home, to cover down payments or closing costs, easing financial strain.
- Offers a 30-year fixed-rate mortgage with competitive rates, compatible with FHA, VA, USDA, or Fannie Mae HFA Preferred loans, per HUD’s loan programs.
- Includes an optional Mortgage Credit Certificate (MCC), offering up to 20% of annual mortgage interest as a federal tax credit, saving thousands over time.
- Targets homes within TDHCA’s purchase price limits, approximately $479,000–$585,000 in Travis County, ensuring affordability focus.
The program’s flexibility and financial incentives make it a vital resource for Austin buyers seeking affordable entry into homeownership, particularly in high-cost areas like Zilker or East Austin.
Eligibility Requirements for My First Texas Home
Eligibility for the My First Texas Home program is based on income, credit, homebuyer status, and property criteria. These requirements ensure assistance reaches those who need it most while aligning with Austin’s market dynamics.
Income Limits: Household income must not exceed TDHCA’s limits, approximately 115% of area median income (AMI) in Austin, or $103,500 for a family of four in 2025, varying by county and household size.
First-Time Buyer Status: Applicants must not have owned a principal residence in the past three years, with exemptions for Veterans and Military or buyers in targeted areas, as defined by TDHCA’s guidelines.
Credit Score: A minimum credit score of 620 is required, though some lenders may impose higher standards, ensuring borrowers can manage mortgage payments.
Homebuyer Education: Completion of a TDHCA-approved homebuyer education course, available online or in-person, is mandatory to prepare buyers for ownership responsibilities.
Property Criteria: The home must be a single-family residence, condo, or townhome in Texas, with purchase price limits aligned with federal guidelines, typically $479,000–$585,000 in Austin.
Prospective buyers can confirm eligibility through TDHCA’s online tools or by consulting approved lenders listed on the TDHCA website.
Benefits of the My First Texas Home Program
The My First Texas Home program offers significant advantages for Austin first-time buyers, addressing financial barriers and providing long-term savings through its loan and tax credit options.
Down Payment Assistance: Up to 5% of the loan amount, as a grant or forgivable second lien, reduces upfront costs, critical in Austin’s $500,000 median price market.
Low-Interest Mortgage: The 30-year fixed-rate loan offers stability and competitive rates, compatible with federal programs like FHA or VA, minimizing monthly payments.
Tax Savings: The MCC provides a tax credit of up to 20% of annual mortgage interest, potentially saving $2,000–$3,000 yearly on a $300,000 loan, per IRS guidelines.
Targeted Area Flexibility: Higher income and price limits in designated Austin areas allow more buyers to qualify, supporting affordability in gentrifying neighborhoods.
These benefits collectively lower the entry barriers to homeownership, making the program an essential tool for Austin residents with limited savings or moderate incomes.
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How to Apply for the My First Texas Home Program
Applying for the My First Texas Home program involves working with TDHCA-approved lenders and meeting documentation requirements. The process is structured to ensure accessibility but requires preparation to avoid delays in Austin’s competitive market.
Verify Eligibility: Use TDHCA’s online eligibility quiz or contact approved lenders to confirm income, credit, and buyer status, available on TDHCA’s homeownership page.
Complete Education: Enroll in a TDHCA-approved homebuyer education course, such as the online “Finally Home!” program, costing approximately $99, to earn a completion certificate.
Gather Documents: Provide two months of pay stubs, three months of bank statements, and recent tax returns to secure mortgage pre-approval from a participating lender.
Select a Property: Choose a home within TDHCA’s price limits ($479,000–$585,000 in Austin), ensuring it meets lender and program standards.
Submit Application: The lender processes the mortgage and DPA application, coordinating with TDHCA for approval, typically within 4–8 weeks.
Early preparation, particularly completing the education course, helps buyers stay competitive in Austin’s fast-paced market, where properties often receive multiple offers.
Challenges and Strategies for Success
Austin’s housing market presents challenges, including competition and price constraints, but strategic planning can maximize the My First Texas Home program’s benefits.
Market Competition: Secure pre-approval early and work with realtors familiar with TDHCA programs to submit strong offers in neighborhoods like Riverside or Southeast Austin.
Price Limits: Focus on homes within TDHCA’s $479,000–$585,000 cap, exploring emerging areas to find eligible properties within budget.
Lender Requirements: Compare at least three TDHCA-approved lenders, as some impose stricter credit or income rules, to find the best terms.
Program Stacking: Combine the 5% DPA with the City of Austin’s $40,000 DPA for maximum assistance, reducing out-of-pocket costs significantly.
Addressing these challenges with proactive planning ensures buyers can leverage the program effectively to secure a home in Austin’s dynamic market.
Case Study: Homeownership with My First Texas Home
A young couple, both public school teachers earning a combined $80,000 annually, utilized the My First Texas Home program to purchase a $400,000 home in South Austin.
With a 620 credit score, they qualified for a 30-year FHA loan and received $20,000 (5% of the loan) in DPA as a forgivable second lien, covering their down payment and closing costs.
The MCC reduced their federal taxes by $1,800 annually, easing their budget. The required homebuyer education course helped them plan for maintenance costs, ensuring long-term stability. After three years, the DPA loan will be forgiven, securing their financial future in a growing neighborhood.
FAQs on My First Texas Home Program in Austin TX
What is the income limit for My First Texas Home in Austin?
Household income must not exceed 115% of the area median income, approximately $103,500 for a family of four in Austin in 2025, varying by household size and county.
Can I combine My First Texas Home with other programs?
Yes, it can be paired with the City of Austin DPA ($40,000) or an MCC for tax savings, reducing upfront and ongoing costs. Confirm with your lender.
Is the DPA from My First Texas Home repayable?
The DPA is offered as a grant or forgivable second lien. If offered as a loan, it’s forgiven after three years of residency; otherwise, no repayment is required.
What types of homes qualify for My First Texas Home?
Eligible properties include single-family homes, condos, or townhomes in Texas, priced below $479,000–$585,000 in Austin, meeting lender and program standards.
How long does the application process take?
From pre-approval to closing, the process takes 4–8 weeks, depending on documentation and market conditions. Education and pre-approval typically take 1–2 weeks.
Is homebuyer education required for My First Texas Home?
Yes, a TDHCA-approved course, costing approximately $99, is mandatory, covering budgeting, credit, and mortgages, available online or in-person.
Can repeat buyers access My First Texas Home?
No, unless in targeted areas or as honorably discharged Veterans and Military. The program primarily serves first-time buyers (no homeownership in three years).
