Texas · First-time buyers

Texas First-Time Home Buyer Guide

Last updated: June 2026

Texas attracts first-time buyers with no state income tax and strong job growth — but property taxes are among the highest in the nation. This guide covers down payment assistance, homestead rules, and how to estimate your real monthly payment.

1. Texas down payment assistance programs

The Texas State Affordable Housing Corporation (TSAHC) and Texas Department of Housing and Community Affairs (TDHCA) offer programs for qualifying first-time and repeat buyers in targeted areas. Common options include:

• My First Texas Home — 30-year fixed mortgage with down payment and closing cost assistance.
• My Choice Texas Home — similar benefits for buyers who don't meet strict first-time definitions.
• TSAHC grants — 3%–5% of the loan amount as a grant (does not require repayment if you stay long enough).
• Local programs — cities like Austin, Dallas, Houston, and San Antonio occasionally offer additional help.

2. Property taxes — the Texas trade-off

Texas has no state income tax, but effective property tax rates often exceed 1.5%–2.0% depending on county and school district. Our calculator defaults to 1.6% with an optional homestead exemption that reduces taxable value. Always verify your county's exact rate before buying.

3. Texas homestead exemption

School districts must offer a $100,000 homestead exemption on your primary residence. Counties may add $3,000–$15,000+ more. File your homestead application with your county appraisal district — deadlines and forms vary. Homestead also provides important creditor protections under the Texas Constitution.

4. Texas closing costs

Texas has no state transfer tax, but buyers still pay title insurance (TDI-regulated rate charts), recording fees, surveys, appraisal, and lender charges. Expect roughly 2%–4% of the purchase price. Use our closing cost calculator for a breakdown.

5. Loan types popular with Texas first-time buyers

• FHA — 3.5% down, flexible credit.
• VA — 0% down for eligible veterans (Texas has a large military population).
• USDA — 0% down in eligible rural/suburban areas.
• Conventional 97 — 3% down for qualified buyers.

6. Step-by-step process

1. Review credit and savings (include taxes & insurance in your budget).
2. Apply for TSAHC/TDHCA programs if eligible.
3. Get pre-approved with a Texas lender.
4. Shop with a realtor; order survey and inspection.
5. Close and file homestead with your appraisal district.