What is TSAHC and how much can it help my first Austin home purchase?

TSAHC is the Texas State Affordable Housing Corporation, a nonprofit chartered by the Texas Legislature to help first-time and moderate-income Texas homebuyers. TSAHC administers three main programs: Home Sweet Texas Home (for any Texas homebuyer up to a defined income limit), Homes for Texas Heroes (for teachers, firefighters, police, EMS, corrections officers, nurses, and veterans), and My First Texas Home (a bond-funded program with the lowest available rates for qualifying first-time buyers). Each program provides down-payment and closing-cost assistance of up to 5 percent of the loan amount, structured as a grant or as a forgivable second lien. On a $400,000 Austin home purchase, that is up to $20,000 of cash the buyer does not have to bring to closing. Most Austin first-time buyers do not know these programs exist. Even lenders sometimes fail to mention them. Ask specifically.

What is TDHCA and how is it different from TSAHC?

TDHCA is the Texas Department of Housing and Community Affairs, a state agency that administers a parallel set of first-time buyer programs alongside TSAHC. The two most common TDHCA programs are My First Texas Home (a taxable-mortgage-revenue-bond program with competitive fixed rates for first-time buyers) and My Choice Texas Home (a similar program without the first-time buyer requirement). Both include down-payment assistance in the 3 to 5 percent range. Practically, TSAHC and TDHCA overlap in what they cover, and a buyer who qualifies for one often qualifies for both. Working with a lender who is approved to originate both programs is important because the specific loan structure, income limits, and county home-price caps differ between the two, and one or the other will typically be a better fit for a specific buyer's situation.

What income limits apply to TSAHC and TDHCA in Travis County?

Income limits are set by county and household size and change annually. For Travis County (Austin) and Williamson County (Round Rock, Georgetown, Cedar Park, Leander), the current program limits generally fall in the roughly $100,000 to $130,000 household-income range depending on the specific program and household size. The limits are higher for teacher, firefighter, EMS, police, corrections officer, nurse, and veteran applicants under the Homes for Texas Heroes track. Home price limits also apply and typically cap at roughly $450,000 to $525,000 for the Austin metro depending on the program and county. Because the caps change annually and the specific numbers matter for eligibility, verify current TSAHC and TDHCA limits with a program-approved lender before you assume you qualify or do not qualify. Do not rely on outdated numbers from blog posts.

Should a first-time buyer in Austin use an FHA loan or a conventional loan?

Depends on credit score, down payment amount, and debt-to-income ratio. FHA loans require 3.5 percent down (580+ credit score) or 10 percent down (500-579 credit), have more flexible debt-to-income guidelines, and are generally more forgiving on credit history problems. The tradeoff is mortgage insurance (MIP) that runs for the life of the loan on most FHA structures. Conventional 97 loans through Fannie Mae and Freddie Mac accept 3 percent down for first-time buyers with strong credit (typically 680+ preferred), come with private mortgage insurance (PMI) that automatically drops off at 78 percent LTV, and generally offer better long-term economics for buyers who can qualify. VA loans (for eligible veterans) are 0 percent down, no PMI, and are frequently the best option for a first-time buyer who qualifies. USDA loans are 0 percent down for properties in rural-designated areas (some outer Austin metro qualifies). The right answer requires actual loan quotes from a lender who understands all four products, not a Google search.

How much cash do I actually need to buy my first Austin home?

For a $400,000 Austin starter purchase, plan for $8,000 to $30,000 total cash-to-close depending on the loan program and whether you use TSAHC or TDHCA assistance. Rough math: 3 percent down conventional 97 ($12,000), plus estimated closing costs ($8,000-$12,000), minus any TSAHC or TDHCA assistance ($10,000-$20,000). The net cash-to-close on a well-structured first-time-buyer purchase in Austin with state program assistance is often $8,000 to $15,000 total. FHA with 3.5 percent down runs slightly higher because of upfront MIP. Higher-price purchases scale up proportionally. Buyers who do not use TSAHC or TDHCA and put 5 percent down conventional on $400,000 need $20,000 down plus $10,000 closing, roughly $30,000 total cash. The state assistance programs are often the difference between renting for another two years and closing this year.

Where should I look for a first Austin home under $500K?

Ten Austin metro cities have real starter inventory in the $250,000 to $500,000 band. Austin proper leads with roughly 1,800 active listings in the band (but skewed to smaller condos and townhomes at that price). Georgetown, Hutto, Pflugerville, Kyle, Round Rock, and Buda all have 500-1,000 active listings each in the starter band. Leander, Manor, and Bastrop round out the top 10. Each has different commute times, school districts, and neighborhood feel. My default recommendation for a first-time Austin buyer is to define your two must-haves (typically employer commute cap and school district preference, or in some cases community feel) before we tour, then narrow the 10 cities to the 2 or 3 that fit. Trying to shop all 10 without a filter is one of the most common time-waste patterns I see with new buyers.

What are the biggest first-time buyer mistakes in Austin?

Five recurring ones. Not knowing about TSAHC or TDHCA and leaving $10,000 to $20,000 on the table. Getting pre-approved by only one lender (missed rate quotes, missed product fits). Underestimating property tax and insurance carrying cost (Austin runs 1.8-2.5 percent property tax plus higher-than-most-states homeowner insurance). Waiving inspection to compete in a fast-moving market and discovering foundation or roof issues after closing. Skipping the homestead exemption filing in the first tax year, which loses meaningful annual savings until it is filed. Each of these is avoidable with the right prep. That is what a buyer's agent who has closed dozens of first-time-buyer transactions does that a for-sale-by-owner or a generic online search does not.

First-Time Homebuyer in Austin: TSAHC + TDHCA Programs Nobody Explains

There has never been a harder decade to buy your first home in Austin, and there has also never been a decade where the state-level assistance programs did more of the heavy lifting than most buyers realize. This page is the working playbook for a first-time Austin buyer today: how the TSAHC and TDHCA down-payment assistance programs actually work, which of the federal loan programs (FHA, Conventional 97, VA, USDA) makes sense for which specific buyer situation, honest starter neighborhood picks across the ten Austin metro cities with real inventory under $500K, and a 12-step playbook from a licensed local realtor who has closed dozens of first-time-buyer transactions.

Important. Luke Allen here, licensed Texas Realtor (TREC #788149). Nothing on this page is loan, tax, or legal advice for your specific situation. Income limits, home-price caps, and program details for TSAHC and TDHCA change annually. Verify current program details with an approved lender before you assume you do or do not qualify. Do not rely on outdated numbers from any source, this page included.

The cash-to-close math for a $400,000 Austin starter

Before committing to loan-program details, most first-time buyers want to know one specific number: how much cash they actually need at closing. Real math for a $400,000 Austin starter home purchase using TSAHC assistance and Conventional 97 financing.

$400,000 Austin starter · conventional 97 + TSAHC assistance

Down payment (3% conventional 97)$12,000

Estimated closing costs (2.5%)$10,000

Property tax escrow (initial)$4,000

Homeowner insurance (12 months)$2,400

Less TSAHC down-payment assistance (5%)-$20,000

Estimated cash to close$8,400

That $8,400 is the real number for a well-structured Austin first-time buyer using state assistance. Compare to the same purchase without TSAHC assistance and with 5 percent down conventional financing, which would run roughly $32,000 total cash at close. The state programs are frequently the difference between renting for another two years and closing this year.

The state assistance is not free money. It is a lien on the property that either forgives over time or is repaid at eventual sale. But for a first-time buyer trying to convert renter equity into ownership, the assistance changes the cash-flow math of getting to closing dramatically.

The five mistakes I see most on first-time Austin purchases

1. Not knowing about TSAHC or TDHCA

Leaves $10,000 to $20,000 of state assistance on the table. Most first-time buyers who walk into a lender without asking specifically about these programs will not be told about them. Ask by name.

2. Getting pre-approved by only one lender

Different lenders quote different rates on the same loan, and different lenders are approved for different program combinations. Get quotes from at least 3 lenders, one of which specifically originates TSAHC or TDHCA programs.

3. Underestimating monthly carrying cost

Austin property tax runs 1.8-2.5 percent of assessed value annually. Homeowner insurance in Central Texas runs $2,000-$3,500 per year on a starter home because of hail season. Both scale with the purchase price. Model the full monthly PITI (principal, interest, taxes, insurance) before committing.

4. Waiving inspection to compete

In fast-moving markets, some buyers waive inspection to win multiple-offer situations. This is one of the highest-regret decisions first-time buyers make. Foundation, roof, HVAC, and electrical findings after closing routinely run $10,000-$30,000 to remediate. Push for an option period that allows inspection even in a competitive market.

5. Skipping the homestead exemption filing

Filing the homestead exemption at your county appraisal district in the first tax year saves $1,000-$1,500 annually and locks in the 10 percent homestead value cap on future appraisal increases. The filing is free and takes 15 minutes. See the property tax protest playbook for the full homeowner tax protection stack.

The 12-step first-time buyer playbook

Pull your credit report. Free at annualcreditreport.com. Fix any errors before shopping for a loan. Credit score directly determines which program tier you qualify for.
Estimate your budget honestly. Rule of thumb: keep total monthly PITI under 28-30 percent of gross monthly income. On a $100K household income, that is roughly $2,500 per month, which supports a $400K-$450K Austin purchase depending on down payment and rates.
Get pre-approvals from 3 lenders, one of which originates TSAHC or TDHCA. Compare rates, closing costs, and program eligibility.
Complete the required homebuyer education course. Most TSAHC and TDHCA programs require an 8-hour online homebuyer education course before you close. Do it early.
Choose your loan program. FHA / Conventional 97 / VA / USDA based on your specific situation. See the comparison table above.
Register a buyer's agent (me, hopefully). The buyer's agent commission on your purchase is paid by the seller in most Austin transactions. Cost to you is generally zero.
Define your two must-haves. Typically employer commute and school district. Filter the 10 starter cities down to 2 or 3.
Tour 6-10 properties over 2-4 weekends. Not more. Tour fatigue produces bad decisions.
Write an offer with an option period. Do not waive inspection. Do not waive appraisal. Reasonable earnest money.
Complete inspection and negotiate repairs. Third-party inspector, real report, real repair requests where warranted.
Close. Bring the estimated $8,000-$15,000 cash-to-close, signed docs, and ID.
File your homestead exemption. Within the first 60 days after closing, file with your county appraisal district. Free, essential, do not skip.

Bottom line

First-time buying in Austin in 2026 is more expensive than any of us would like, but it is more achievable than most buyers realize once TSAHC or TDHCA assistance enters the math. Most Austin first-time buyers do not know these programs exist. That gap is the biggest single reason young Austin renters delay their first home purchase by two or three years longer than they need to.

If you are considering your first Austin home purchase in the next 12 months, reach out. I will introduce you to a TSAHC or TDHCA-approved lender for a real pre-approval and program-eligibility check, and I will help you narrow the 10 metro starter cities down to the 2 or 3 that fit your specific commute, budget, and lifestyle. No pressure, no obligation, free either way.

First-time Austin homebuyer: the TSAHC and TDHCA programs most buyers never hear about

Two Texas state programs cover most of your down payment. Most buyers never hear about them.

The three programs that cover most of the down payment

Home Sweet Texas Home

Homes for Texas Heroes

My First Texas Home

FHA, VA, USDA, and Conventional 97

The ten Austin metro cities with real starter inventory under $500K

The cash-to-close math for a $400,000 Austin starter

$400,000 Austin starter · conventional 97 + TSAHC assistance

The five mistakes I see most on first-time Austin purchases

The 12-step first-time buyer playbook

Bottom line

Get your first-time Austin buyer plan