Understanding Down Payment Assistance in Texas: How to Strategically Apply in New Braunfels and San Antonio

Question: When is the best time to apply for down payment assistance in Texas, and which programs should you focus on if you’re buying in New Braunfels or San Antonio?

Snippet Answer: The best time to apply for down payment assistance (DPA) in Texas is early in the fiscal year—between October and December—when funds are freshly allocated. By combining statewide programs with local incentives like San Antonio’s HIP 80/120 and planning your application strategy, you can significantly reduce your upfront costs and increase your chances of approval.

Understanding Down Payment Assistance in Texas

For many Texas homebuyers, especially those purchasing in the New Braunfels–San Antonio area, down payment assistance programs can make homeownership more attainable. These programs provide financial support through grants or forgivable loans that help cover down payments and closing costs—often up to 5% of your loan amount. However, understanding timing, eligibility, and program structure is key to taking advantage of these opportunities.

Major Texas DPA Programs Available

Statewide Options: TDHCA & TSAHC

The Texas Department of Housing and Community Affairs (TDHCA) offers two cornerstone programs:

• My First Texas Home Program – Designed for first-time buyers and veterans, offering up to 5% of the loan amount as a grant or deferred forgivable second lien. Minimum credit score: 620.

• My Choice Texas Home Program – Similar to the above, but available to all eligible buyers (not just first-timers). Offers 30-year fixed-rate mortgages with optional down payment assistance.

The Texas State Affordable Housing Corporation (TSAHC) complements these options with two standout programs:

• Home Sweet Texas Home Loan Program – Provides up to 5% assistance as a grant or a zero-interest second mortgage forgiven after three years.

• Homes for Texas Heroes Program – Specifically designed for teachers, firefighters, EMS personnel, police officers, correctional officers, and veterans. Offers the same 5% assistance structure without requiring first-time buyer status.

These statewide programs can often be layered with local assistance programs for greater impact—as long as your lender confirms compatibility.

Local Programs: San Antonio’s HIP 80 and HIP 120

If you’re buying within the San Antonio city limits, the Homeownership Incentive Programs (HIP 80 and HIP 120) are essential to know.

• HIP 80: For households earning up to 80% of the Area Median Income (AMI). Provides $1,000 to $30,000 in assistance as a 0% interest, fully forgivable loan over 5–10 years.

• HIP 120: For households earning between 81% and 120% of AMI. Offers $1,000 to $15,000 in assistance, forgiving 75% of the loan over 10 years. The remaining 25% is due upon sale or refinance.

Both programs require:

• A minimum $500 earnest money deposit

• A HUD-approved 8-hour homebuyer education course

• The home to be within San Antonio city limits

Property price limits (as of 2025):

• Existing homes: up to $305,200 (HIP 120) or $263,000 (HIP 80)

• New construction: up to $325,800 (HIP 120) or $278,000 (HIP 80)

Timing Is Everything: When to Apply

Why October–December Matters Most

Most DPA programs operate on federal or state fiscal years, meaning funding typically renews October 1 each year. Applying early in the fiscal year gives you access to newly replenished funds—before allocations are exhausted.

For example:

• The City of San Antonio receives annual HUD grant allocations (including HOME funds) that directly support HIP 80/120.

• The TDHCA and TSAHC programs refresh funding cycles and interest rate structures at the start of the fiscal year.

In short: Apply between October and December to maximize your chances.

First-Come, First-Served

Nearly all programs in Texas are first-come, first-served. Once funding runs out, new applicants must wait for the next allocation. That’s why preparing in advance—with education certificates, documentation, and pre-approval—is so critical.

How to Prepare Strategically

1. Complete your homebuyer education course early. Most programs require this 8-hour class before you can apply.

2. Get pre-approved with a participating lender. These programs must be accessed through approved lenders.

3. Gather documentation in advance: tax returns, W-2s, pay stubs, bank statements, and IDs.

4. Check your credit score. Most programs require 620 or higher; HIP 80/120 may accept as low as 580.

5. Set a calendar reminder for early October. Submit applications as soon as funding opens.

By preparing before the fiscal year begins, you’ll be ready to move quickly once funds become available.

Combining Multiple Programs (and Why It Matters)

In many cases, you can combine or “stack” programs to maximize assistance.

For example:

• A buyer could use TDHCA’s My First Texas Home with San Antonio’s HIP 80 for layered support.

• Veterans and first responders could add TSAHC’s Homes for Texas Heroes for additional benefits.

Some programs even integrate with Mortgage Credit Certificates (MCCs), offering up to $2,000 in annual federal tax credits for qualifying buyers.

Always verify stacking eligibility with your lender, since not all mortgage types allow multiple DPA sources.

Program Restrictions and Forgiveness Terms

Understanding repayment and forgiveness rules prevents surprises later:

• Grants – No repayment required.

• Forgivable Loans – Require you to remain in the home for 3–10 years; early sale or refinance may trigger repayment.

• Deferred Loans – No monthly payments, but due in full when you sell, refinance, or pay off your mortgage.

For HIP programs:

• HIP 80 loans forgive 100% over 5–10 years.

• HIP 120 loans forgive 75% over 10 years, with 25% due upon sale or refinance.

Why This Matters for Veterans and First Responders

If you’re a veteran, firefighter, police officer, EMS worker, or teacher, you may qualify for TSAHC’s Homes for Texas Heroes Program. This initiative extends the same assistance options without the first-time buyer restriction—making it an excellent path to homeownership for public service professionals in the San Antonio region.

Pairing that with local programs like HIP 80 or HIP 120 can often create meaningful savings and make your purchase much more attainable.

How Funding Works in Practice

To give a sense of scope, the City of San Antonio receives about $23 million annually in HUD funding, much of which supports homeownership programs. However, once funds are committed, new applicants may have to wait until the next fiscal year—which is why early timing and preparation are so important.

Key Takeaways for 2025 Buyers

If you plan to buy a home in New Braunfels or San Antonio in the coming year:

• Apply early (October–December) when funds refresh.

• Complete your education course and gather documentation in advance.

• Get pre-approved with a participating lender.

• Explore stacking opportunities between statewide and local DPA programs.

• Pay close attention to forgiveness terms and occupancy requirements.

With smart preparation, you can significantly reduce your upfront costs and position yourself to buy with confidence.

Bottom Line:
Down payment assistance programs in Texas can provide thousands in financial help—but timing and preparation make all the difference. If you’re planning to buy in the New Braunfels–San Antonio area, start preparing now so you can apply as soon as new funding becomes available in October.

Ready to explore which programs fit your situation? Book a consultation today to discuss your homeownership goals and financing options.