What Is TSAHC?
TSAHC, the Texas State Affordable Housing Corporation, is a nonprofit created by the Texas Legislature in 1994 to help Texans reach homeownership. It is not a lender. It does not originate mortgages directly. Instead, it operates two down payment assistance programs through a network of approved mortgage lenders across the state: Home Sweet Texas and Homes for Texas Heroes.
The assistance is funded through the sale of mortgage revenue bonds and related financing, which means the money is real, renewable, and does not come out of your pocket at closing. For many Houston and Texas buyers, TSAHC is the difference between renting for another three years and buying this year.
The honest summary: TSAHC gives you up to 5% of your loan amount. You can take it as a grant (never repaid) or as a second lien that is forgiven after three years in the home. It works with FHA, VA, USDA, and conventional loans. Income limits are higher than most buyers expect. And you do not have to be a first-time buyer.
The Two TSAHC Programs
TSAHC operates two separate down payment assistance programs. They share most of the same rules and benefits. The main difference is who qualifies.
Home Sweet Texas
- Who qualifies: Any Texas buyer who meets income limits
- DPA: Up to 5% of loan amount
- Form: Grant or forgivable second lien (3-year term)
- Loan types: FHA, VA, USDA, Conventional (HFA)
- Min credit: 620 (government), 640 (conventional)
- First-time buyer: Not required
- MCC available: Yes, for first-time buyers (see below)
Homes for Texas Heroes
- Who qualifies: Teachers & teacher aides (pre-K through 12), police & peace officers, firefighters (paid or volunteer), EMS personnel, corrections officers, county jailers, veterans, nursing faculty
- DPA: Up to 5% of loan amount
- Form: Grant or forgivable second lien (3-year term)
- Loan types: FHA, VA, USDA, Conventional (HFA)
- Min credit: 620 (government), 640 (conventional)
- First-time buyer: Not required
- MCC available: Yes, FREE with DPA for first-time buyers
Homes for Texas Heroes tends to come with a slightly lower interest rate than Home Sweet Texas. If you are a teacher, veteran, or first responder, always run both programs side by side at lock time. Rate differences can flip which program saves you more money.
TSAHC Income Limits for Houston and Texas (2026)
TSAHC income limits are set at the county level and based on area median family income (AMFI). TSAHC recently raised the ceiling from 115% to 125% AMFI, which moved tens of thousands of Texas households into eligibility for the first time.
For Houston area buyers (the Houston, The Woodlands, Sugar Land HMFA, which covers Harris, Fort Bend, Galveston, Montgomery, Chambers, Liberty, and Waller counties), the 2026 income limit for most TSAHC programs is $122,100. In targeted areas, the limit is higher. The 80% AMFI tier used for the MCC first-time buyer requirement is approximately $74,560 for non-targeted areas.
| Household Situation | Harris / Fort Bend / Galveston / Montgomery | Applies To |
|---|---|---|
| Most TSAHC DPA (non-bond) | $122,100 | Home Sweet Texas, Texas Heroes, all household sizes |
| Bond-backed FHA / VA / USDA, 80% AMFI | ~$74,560 | Targeted area requirement, MCC first-time buyer tier |
| Targeted area (expanded) | Higher (varies by census tract) | Designated targeted census tracts in Houston, specific counties |
Income limits change annually, usually in late spring. The figures above reflect TSAHC's current 2026 limits. For counties outside the Houston metro, limits are different. TSAHC's official limit chart is the authoritative source, or we can look yours up in about two minutes.
TSAHC Purchase Price Limits (2026)
TSAHC also caps the price of the home you can buy with their programs. For the Houston HMFA, 2026 purchase price limits are approximately:
- Non-targeted areas: around $481,176
- Targeted areas: around $588,104
For a Houston family looking at homes between $250,000 and $475,000, this cap rarely becomes a problem. It only binds when buyers are considering higher-priced homes inside the loop, Memorial, Bellaire, or West U, where most properties are above TSAHC's ceiling.
Grant vs Forgivable Second Lien: Which Should You Choose?
Every TSAHC applicant faces the same choice: take the assistance as a grant or as a forgivable second lien. Most buyers do not realize this is a choice at all.
The Grant Option
- No repayment, ever
- No second lien on the property
- Slightly higher interest rate on your first mortgage (typically 0.25 to 0.50 percent above the forgivable lien rate)
- Cleanest option. Best when you plan to stay in the home short term or refinance within three years.
The Forgivable Second Lien Option
- Lower interest rate on your first mortgage
- Second lien on the property for the DPA amount
- Forgiven after three years of on-time mortgage payments and continued occupancy
- Repaid on a prorated basis if you sell or refinance in the first three years
- Best when you are confident you will stay in the home at least three years
In almost every Houston deal we run, we build out both scenarios and compare total cost over five, seven, and ten years. The right answer depends on rate spread at lock, your stay horizon, and whether you plan to refinance when rates drop. There is no universally correct answer.
The Mortgage Credit Certificate (MCC) Bonus
TSAHC layers a Mortgage Credit Certificate on top of their DPA for eligible first-time buyers. The MCC is a federal tax credit equal to 15% of the mortgage interest you pay each year, capped at $2,000. It reduces your federal tax liability dollar-for-dollar. It is not a deduction. It is a credit.
On a $300,000 loan at 6.5%, you pay roughly $19,400 in interest during year one. A 15% MCC would give you a federal tax credit of $2,000 (hitting the cap), every year, for the life of the loan, as long as you live in the home.
Over 30 years, that is potentially $60,000 in federal tax savings. The MCC is also free when paired with Homes for Texas Heroes DPA. For Home Sweet Texas, it carries a cost but often still pays for itself in the first year.
The MCC is the most underused TSAHC feature. Lenders rarely mention it because the paperwork is slightly more involved and they do not earn extra compensation for adding it. At InSync, we model it for every first-time buyer who qualifies.
TSAHC Loan Requirements at a Glance
- Minimum credit score: 620 for FHA, VA, USDA. 640 for conventional (HFA Advantage or HFA Preferred). Add 0.25% to your lender fee for government loans with a 620-639 score.
- Maximum DTI: No hard maximum with AUS (automated underwriting) approval. FHA manual underwriting capped at 43% with 640 or higher.
- Loan types: FHA, VA, USDA, and conventional HFA Advantage (Fannie Mae) or HFA Preferred (Freddie Mac).
- Property type: Primary residence only. Single family, 2-4 unit, condo (with approval), or manufactured home.
- Homebuyer education: Required. Free online HUD-approved course, typically 6-8 hours.
- First-time buyer: Not required for most DPA. Required for MCC unless you are a qualified veteran or buying in a targeted area.
- Origination fees: Lender may charge up to 1% origination plus customary third-party fees.
Real Numbers: What 5% TSAHC DPA Looks Like
Here is what the TSAHC DPA actually covers on typical Houston-area FHA purchases. These examples use the 3.5% FHA minimum down payment and assume a conservative closing cost estimate.
| Home Price | FHA Loan (96.5%) | 5% TSAHC DPA | Down Payment Needed | Remaining for Closing Costs |
|---|---|---|---|---|
| $250,000 | $241,250 | $12,063 | $8,750 | $3,313 |
| $300,000 | $289,500 | $14,475 | $10,500 | $3,975 |
| $350,000 | $337,750 | $16,888 | $12,250 | $4,638 |
| $400,000 | $386,000 | $19,300 | $14,000 | $5,300 |
| $450,000 | $434,250 | $21,713 | $15,750 | $5,963 |
On a $350,000 home, the 5% TSAHC grant covers your entire $12,250 down payment and leaves $4,638 toward closing costs. Pair it with modest seller concessions and you can realistically close with less than $2,000 out of pocket, including your earnest money and option fee. Run your exact numbers in our mortgage analyzer to see what this looks like for your budget.
How to Apply for a TSAHC Loan
The TSAHC application is not a separate form you fill out. It is built into your mortgage process, handled by your lender. Here is how we run it at InSync for Texas buyers.
- Free 30-minute eligibility consultation. We review your income, credit, savings, and home price range. We confirm which TSAHC program fits (Heroes or Home Sweet), run both the grant and forgivable lien scenarios, and check whether the MCC adds up for you.
- Pre-approval with TSAHC flagged. We issue a pre-approval letter that reflects the DPA, so when you make an offer, the seller sees your financing is already structured.
- Homebuyer education course. A HUD-approved online course. Six to eight hours. Free. We send you the direct link and you complete it on your own schedule before closing.
- Loan application. Submit the full TSAHC application with your mortgage file. We handle it in parallel with standard loan processing, so there is no added timeline.
- Underwriting and lock. Lock your rate. Finalize the grant vs lien election based on current rate spread.
- Close. TSAHC DPA funds are wired to the title company. Standard 30 to 45 day closing timeline.
TSAHC vs Other Texas Down Payment Assistance Programs
TSAHC is the best-known DPA program in Texas, but it is not the only one. For Houston buyers, the right choice depends on income, location, and first-time buyer status.
| Program | Max Assistance | Income Limit (Harris) | First-Time Buyer? | Best For |
|---|---|---|---|---|
| TSAHC (Heroes or Home Sweet) | 5% of loan | $122,100 | No | Most buyers. Best grant option. |
| SETH (Southeast Texas Housing) | 5% of loan | $122,100 | No | Houston metro. Fast processing. |
| TDHCA My First / My Choice Texas Home | 5% of loan | $122,100 | My First: Yes. My Choice: No. | Stacking with other programs. |
| City of Houston HAP | Up to $50,000 | ~$72,650 (80% AMI) | Yes (or 3+ years since ownership) | Lower-income buyers inside Houston city limits. |
| Harris County CDBG | Up to $24,999 | ~80% AMI | Yes | Unincorporated Harris County. |
We walk you through a side-by-side comparison before you pick one. For a full Houston DPA landscape, see our Houston Down Payment Assistance hub or the full 2026 program guide.
Why Work With an Approved TSAHC Lender
TSAHC programs can only be originated through an approved lender. Not every mortgage broker or bank offers them. Many national lenders technically allow TSAHC but do not actively work it because the paperwork is heavier and the compensation is similar to a conventional loan.
InSync Homes & Loans is an approved TSAHC lender. We run TSAHC DPA regularly for Houston and Texas buyers. Ben Helstein is a licensed mortgage loan originator (NMLS #1577314) and real estate agent, which means we can handle both sides of your purchase, structure the offer around the DPA, and keep the TSAHC paperwork moving in parallel with your underwriting.
We have structured TSAHC-assisted closings for teachers, veterans, nurses, first responders, dual-income households earning over $110,000, single buyers at $55,000, and repeat buyers who had no idea they still qualified. If you are in Houston, Sugar Land, Katy, Pearland, Cypress, The Woodlands, or any Texas market, we can run your eligibility in about two minutes.
TSAHC FAQ
Do I have to be a first-time buyer to use TSAHC?
No. Both Home Sweet Texas and Homes for Texas Heroes are open to repeat buyers who meet the income limits. The MCC tax credit is restricted to first-time buyers unless you are a qualified veteran or purchasing in a TSAHC-designated targeted area.
How much income can I make and still qualify for TSAHC?
For Houston area counties (Harris, Fort Bend, Galveston, Montgomery, Chambers, Liberty, Waller), the 2026 TSAHC income limit for most programs is $122,100, regardless of household size. Limits vary by county and are higher in designated targeted areas. TSAHC raised the ceiling from 115% to 125% AMFI recently, so households previously too high may now qualify.
Do I have to pay back the TSAHC grant?
If you select the grant option, no. It is a true grant with no repayment required, ever. If you select the forgivable second lien option, the balance is forgiven after three years of on-time mortgage payments and continued occupancy. If you sell or refinance within three years, you repay a prorated amount.
Can I combine TSAHC with FHA, VA, or conventional loans?
Yes. TSAHC DPA works with FHA, VA, USDA, and conventional HFA Advantage or HFA Preferred loans. Most Houston first-time buyers pair TSAHC with an FHA loan because of FHA's 3.5% minimum down payment and flexible credit requirements.
What is the difference between Home Sweet Texas and Homes for Texas Heroes?
The DPA amount and structure are the same. The difference is eligibility: Homes for Texas Heroes is limited to teachers, firefighters, EMS personnel, peace officers, corrections officers, veterans, and nursing faculty. Home Sweet Texas is open to everyone who meets the income limits. Texas Heroes often carries a slightly lower interest rate and a free MCC.
What credit score do I need for a TSAHC loan?
Minimum 620 FICO for FHA, VA, or USDA loans. Minimum 640 for conventional HFA loans. Scores between 620 and 639 on government loans carry an additional 0.25% in lender fees.
Who can originate a TSAHC loan?
Only TSAHC-approved mortgage companies and their loan officers. TSAHC maintains a directory of approved lenders on their website. InSync Homes & Loans is an approved TSAHC lender. If your current lender says they do not offer TSAHC, it means they are not approved, not that you do not qualify.
How long does a TSAHC-assisted closing take?
Typical TSAHC closings take 30 to 45 days, the same as a standard loan when the lender processes the DPA application in parallel with the mortgage file. Delays happen when lenders submit TSAHC paperwork only after mortgage underwriting is complete.
Does TSAHC work outside Houston?
Yes. TSAHC is a statewide Texas program. It works in every Texas county. Income and purchase price limits change by county, but the program structure is identical across the state.
Are TSAHC interest rates competitive?
TSAHC rates typically run 0.25 to 0.50 percent above standard market rates. On a $300,000 loan, that is $40 to $90 more per month in interest. Against $12,000 to $15,000 in down payment grant money, the math favors the DPA heavily. Homes for Texas Heroes usually offers a slightly lower rate than Home Sweet Texas.