Down Payment Assistance for Austin Buyers: City and State Programs

The down payment is the biggest hurdle for most first-time buyers, and in a market where the Census median home value in Austin is $555,300, even a small percentage is a large sum. Two public programs can help Austin-area buyers. They have different rules, and the time to look at them is before you start touring homes, because they shape your budget, your lender and sometimes where you can buy.

The City of Austin program

The City of Austin’s Housing Department says income-eligible first-time homebuyers may qualify for down payment assistance, and that the program covers down payment and closing costs, including prepaid expenses associated with buying a home. Buyers may qualify for up to $40,000 in assistance, and the sales price of the home cannot exceed $440,000.

Requirement	City of Austin program
Buyer	First-time homebuyer; has not owned a home in the last three years
Income	At or below 80% of Median Family Income
Home	Single-family home or condominium in Austin’s full purpose city limits
Price	No more than $440,000
Assistance	Up to $40,000 toward down payment and closing costs
Before applying	Complete a homebuyer education course

The city’s checklist for verifying income asks for the last two consecutive months of pay stubs for every household member over 18 and six months of checking and savings statements for all household members, so gather documents early. The location rule matters too: an address in a suburb or outside the full purpose city limits does not qualify, and the city points buyers to its jurisdictions web map to check.

Homebuyer education

Both programs require a homebuyer education course. The city lists non-profit partners that offer courses with a HUD-approved curriculum, online classes and homeownership counseling, and notes that the course costs $99, plus a handbook you buy separately. At the end you receive a certificate of completion, which you will need for the application.

The state’s TSAHC programs

The Texas State Affordable Housing Corporation describes itself as a nonprofit created by the Texas Legislature to help Texans buy homes. It works statewide, so it can help with homes in the suburbs as well as in Austin, and it serves repeat buyers as well as first-time buyers.

Feature	TSAHC down payment assistance
Loan	30-year fixed-rate mortgage
Assistance	Up to 5% of the loan for the down payment
Form	A grant or a deferred, forgivable second lien loan
Credit score	620 minimum
Buyers	First-time or repeat
Education	Approved homebuyer education course required

TSAHC also offers a Mortgage Credit Certificate, which it describes as a federal tax credit that refunds part of your mortgage interest every year for the life of the loan. The MCC has a first-time buyer requirement, waived for veterans and homes in targeted areas, must be combined with TSAHC’s non-bond down payment assistance, and depends on income and sale price limits. TSAHC reports it awarded $85.60 million in down payment assistance in 2025.

Putting numbers on it

On a home at the City of Austin program’s $440,000 price cap, its maximum $40,000 of assistance would be a little over 9 percent of the price, and the city says it can go toward both the down payment and closing costs. TSAHC’s assistance is a share of the loan instead: 5 percent of a $400,000 mortgage is $20,000. Either way, the help reduces the savings you need before you can make an offer, though the program’s terms and repayment rules come with it, so read them before you rely on the money.

Working through a lender

Neither program is something you apply for on your own at the last minute. TSAHC tells buyers to contact one of its participating mortgage lenders to start the application, and the City of Austin requires buyers to be approved for a mortgage from one of its participating lenders. Ask any lender you talk to whether it participates in the program you want before you go further.

Which one fits?

• Buying inside Austin’s city limits, first-time, at or below 80% MFI, under $440,000: look first at the City of Austin program.
• Buying in a suburb, or a repeat buyer: TSAHC’s statewide programs are the place to start.
• First-time buyer who wants a yearly tax credit: ask about TSAHC’s Mortgage Credit Certificate.

What assistance does not change

Assistance lowers the cash you need at the start, but the monthly cost of owning stays the same, and a second lien means more paperwork if you sell or refinance. Budget for property tax and insurance as carefully as for the mortgage; Texas Property Tax for Austin Homeowners: Rates, Deadlines and Protests shows how. For the other cash you need on closing day, see Closing Costs in Texas: Title Insurance, Lender Fees and What to Expect, and for where the City’s $440,000 price cap still buys a home, Austin-Area Neighborhoods by Budget: Where Different Price Ranges Go Furthest.