Austin Down Payment Assistance Programs

Buying a home in Austin is more achievable than many people realize, and a big reason for that is the number of down payment assistance programs available to buyers in this area. Whether you are purchasing your first home or have owned before, there are programs that can put thousands of dollars toward your down payment and closing costs, some of which you never have to pay back.

This guide covers every major program available to Austin-area buyers right now, including a few that most buyers never hear about. We have updated the numbers to reflect the latest income limits, purchase price caps, and program changes, including one significant update to the City of Austin program that makes more homes eligible than ever before.

What Is Down Payment Assistance?

Down payment assistance (DPA) is money provided by a government agency, nonprofit, or housing finance corporation to help buyers cover upfront home purchase costs. It comes in a few different forms:

• Grants: Free money that does not require repayment under any circumstances.
• Forgivable loans: Loans that are forgiven after a set number of years as long as you stay in the home. If you sell or refinance before the forgiveness period ends, you repay a prorated portion.
• Deferred second loans: Loans with no monthly payments that come due only when you sell, refinance, or pay off your first mortgage.
• Tax credits: Annual federal tax credits that reduce what you owe the IRS each year for the life of your loan.

Programs Available to Austin Buyers in 2026

Here is a quick look at what is available and who each program serves:

City of Austin Down Payment Assistance Program

The City of Austin runs its own DPA program through the Austin Housing Finance Corporation (AHFC), and it received a significant update in 2026. The purchase price cap was raised to $579,025, which opens up a much wider range of homes to buyers who qualify.

The program provides a zero-interest forgivable loan of up to $40,000 toward your down payment and closing costs. The loan is forgiven over 5 to 10 years depending on the amount, as long as you stay in the home and do not sell or refinance during that period.

What You Need to Qualify

• Income limit: Household income at or below 80% of the Austin Median Family Income.
• First-time buyer status: You must not have owned a home in the past three years.
• Purchase price cap: $579,025 (updated 2026).
• Location: The home must be within Austin city limits.
• Primary residence: Must be your primary home, not a rental or investment property.
• Homebuyer education: A HUD-approved homebuyer education course is required before closing.

How the Assistance Works

• VA, FHA, and USDA loans: 5% of the loan amount.
• Conventional loans: 3% of the loan amount.

To apply, contact a participating lender or reach the City of Austin Housing Department directly at (512) 974-3100. The process typically takes 4 to 6 weeks from initial application to approval.

TSAHC Home Sweet Texas

The Texas State Affordable Housing Corporation (TSAHC) runs two closely related programs. Home Sweet Texas is the general version, open to any Texas buyer who meets the income requirements.

The assistance is up to 5% of your loan amount and can be structured as a grant (no repayment ever) or a forgivable second lien (repaid only if you sell or refinance within three years). This flexibility makes it one of the more attractive options, especially for buyers who want to preserve cash but may move in a few years.

2026 Income and Purchase Price Limits (Travis County)

• Income limit (Home Sweet Texas): $201,600 (updated June 2026).
• Purchase price limit (non-targeted areas): $598,019.
• Purchase price limit (targeted areas): $730,912.
• Minimum credit score: 620.
• Homebuyer education: Required.

Home Sweet Texas is not limited to first-time buyers, which makes it one of the more accessible state programs for repeat buyers who still need help with upfront costs.

Homes for Texas Heroes

Homes for Texas Heroes is TSAHC's program for public service workers. If you work in one of the qualifying professions, you get access to the same 5% down payment assistance as Home Sweet Texas, plus a rate discount that typically runs 0.25 to 0.50 percentage points below standard market rates.

Who Qualifies

• Teachers, librarians, counselors, and school nurses in public schools
• Police officers and public security officers
• Firefighters and EMS personnel
• Healthcare workers and allied health faculty
• Correctional and juvenile corrections officers
• Veterans and active-duty military

2026 Program Details (Travis County)

• Income limit: $228,480 (updated June 2026).
• Purchase price limit (non-targeted): $598,019.
• Purchase price limit (targeted): $730,912.
• Minimum credit score: 620.
• Assistance structure: Grant (no repayment) or forgivable second lien (repaid if sold or refinanced within 3 years).

TDHCA My First Texas Home

The Texas Department of Housing and Community Affairs (TDHCA) runs the My First Texas Home program, which provides up to 5% of your loan amount as a deferred second mortgage at 0% interest. Unlike the TSAHC grant option, this is a loan that eventually comes due when you sell, refinance, or pay off your first mortgage. However, you make no monthly payments on it, and you benefit from a below-market interest rate on your primary loan.

Program Details

• Assistance amount: Up to 5% of the loan amount.
• Structure: 0% interest, deferred second lien due at sale or refinance.
• Income limit: Approximately $153,870 for households of three or more in the Austin-Round Rock metro area.
• Minimum credit score: 620.
• First-time buyer: Required (not owned a home in the past three years).
• Homebuyer education: Required.

My First Texas Home can be combined with a Mortgage Credit Certificate (see below) for additional savings.

Travis County Hill Country Home Down Payment Assistance

This is the program most Austin buyers never hear about, and it is worth knowing. The Travis County Housing Finance Corporation runs the Hill Country Home DPA program, which offers 4%, 5%, or 6% of the loan amount as a zero-interest forgivable second mortgage. The loan is fully forgiven after 10 years.

What makes this program stand out is the income limit. At 140% of area median income, it is by far the most generous of any local program. A household of four can earn up to $138,460 and still qualify. It is also not limited to first-time buyers, which means repeat buyers who meet the income and purchase price requirements are eligible.

Program Details

• Assistance amount: 4%, 5%, or 6% of the loan amount (forgivable after 10 years at 0% interest).
• Income limit: 140% AMI, currently $138,460.
• Purchase price cap: $364,452.
• Minimum credit score: 640.
• Max debt-to-income ratio: 45%.
• First-time buyer required: No. Repeat buyers are welcome.
• Primary residence: Required.
• Location: Travis County.

The purchase price cap of $364,452 is the main limiting factor in today's Austin market, but it makes this program well-suited for buyers looking in more affordable pockets of Travis County, condos, or townhomes. Apply through any of the 34 participating lenders. Contact the Travis County Housing Finance Corporation at (512) 854-9116 for a lender list.

Mortgage Credit Certificate (MCC)

An MCC is a federal tax credit that lets you claim 20 to 30% of the mortgage interest you pay each year, up to a maximum of $2,000 per year. Unlike a deduction, a tax credit is a dollar-for-dollar reduction in what you owe the IRS. Over a 10-year period, that adds up to as much as $20,000 in real savings.

Important update: The MCC is no longer available as a standalone program through the City of Austin. It is now offered exclusively as an add-on to TSAHC's DPA programs (Home Sweet Texas and Homes for Texas Heroes). If you plan to use an MCC, make sure your lender is a TSAHC-approved lender and apply for the MCC at or before closing, as it cannot be added after the fact.

• Annual benefit: Up to $2,000 per year in federal tax credits.
• Duration: Applies for the life of the loan as long as you remain in the home.
• Available through: TSAHC-participating lenders only (no longer a standalone City of Austin program).
• Stackable with: TSAHC Home Sweet Texas and Homes for Texas Heroes DPA.

Can You Stack These Programs?

Yes, in many cases. Combining programs is one of the smartest moves a buyer can make, and lenders who specialize in DPA know how to structure these layered loans correctly. Some common combinations:

• TSAHC Home Sweet Texas DPA + Mortgage Credit Certificate: Stack the upfront grant with an ongoing annual tax credit.
• TDHCA My First Texas Home + MCC: Deferred down payment help plus a lifetime tax credit.
• City of Austin DPA + TSAHC: If you qualify for the City program and also meet TSAHC income limits, you may be able to combine both.

The key is working with a lender who is approved for all the programs you want to use. Not every lender participates in every program. Ask specifically whether they are TSAHC-approved, TDHCA-approved, and familiar with the Travis County Hill Country Home program before committing.

How to Get Started

1. Check your credit score. Most programs require a minimum of 620 to 640. If you are below that, talk to a lender about a credit improvement plan before applying.
2. Complete a HUD-approved homebuyer education course. Most programs require this, and it is easier to do it early rather than scrambling at the last minute before closing.
3. Find a participating lender. This is the most important step. Ask specifically which DPA programs they are approved to offer. A lender who only works with one program may miss a better fit for your situation.
4. Get pre-approved and identify your target programs. Your lender will verify your income, credit, and purchase price needs against each program's limits to determine which ones you qualify for.
5. Apply early. Some programs, especially the City of Austin DPA, have a review process that takes 4 to 6 weeks. Plan accordingly so your assistance is approved before your closing date.

Frequently Asked Questions

Bottom Line

Austin has more down payment help available than most buyers realize, and the 2026 program updates have made things more accessible, not less. The City of Austin's purchase price cap increase to $579,025 is significant. The Travis County Hill Country Home program remains one of the best-kept secrets for buyers who do not need to be first-time owners and can work within the purchase price limit.

If you are buying in Austin and want to understand which programs you qualify for, we are happy to walk you through it. Reach out to the Eleven Oaks Realty team and we will connect you with lenders who know these programs inside and out.

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