Austin First-Time Buyer Incentives and Programs

Buying your first home in Austin can feel daunting, but a robust mix of local, county, and state incentives can ease the financial burden. From City of Austin down payment assistance to statewide grants and tax credit programs, qualified buyers may access up to $40,000 in zero‑interest funds. This article breaks down the eligibility criteria, benefits, timelines, and how to successfully apply.

City of Austin Down Payment Assistance (DPA)

• Assistance Amount: up to $40,000 in a 0% interest forgivable loan
  
• Forgiveness: fully forgiven after 5 continuous years of occupancy
  
• Eligibility:
  
  • First-time homebuyer (no homeownership in past 3 years)
    
  • Household income ≤ 80% of AMI
    
  • Purchase price ≤ $579,025
    
  • HUD-approved homebuyer education certificate
    
  • Must close within Austin full-purpose city limits
    
• Covered Costs: down payment, closing fees, pre-paid expenses
  

Tips:

1. Confirm property eligibility using the city’s jurisdiction map.
   
2. Enroll in a HUD-approved homebuyer class—often a prerequisite.
   
3. Apply via a participating lender after mortgage pre-approval.
   

Travis County Hill Country Home DPA

• Assistance: 4–6% of loan amount, via a 0% interest second mortgage forgivable after 10 years
  
• Eligibility:
  
  • Credit score ≥ 640, DTI ≤ 45%
    
  • Income ≤ 140% of AMI (~$138,460)
    
  • Purchase price cap ~$364,452
    
• Coverage area: Travis County, including homes outside Austin city limits

Austin Community Land Trust (ACLT)

This program separates land and home ownership. Borrowers own the structure while leasing the land, keeping costs and resale prices affordable. Qualifying buyers can benefit from reduced upfront costs and long-term stability.

Statewide Programs (TSAHC & TDHCA)

1. Texas State Affordable Housing Corporation (TSAHC)

• Programs:
  
  • Home Sweet Texas – open to all first-time buyers
    
  • Homes for Texas Heroes – for public servants (teachers, first responders, veterans)
    
• Benefits:
  
  • Up to 5% in down payment assistance (grant or forgivable loan)
    
  • Mortgage Credit Certificate (MCC): save up to $2,000/year in taxes
    
• Eligibility: Minimum credit score 620, income and purchase limits apply
  
• Coverage: All of Texas, with specific guidelines for Austin/Central Texas
  

2. Texas Department of Housing & Community Affairs (TDHCA)

• Programs:
  
  • My First Texas Home – for first-time buyers & veterans
    
  • My Choice Texas Home – open to both first-time and repeat buyers
    
• Benefits:
  
  • Below‑market interest rate, down payment/closing assistance up to 5%
    
  • MCC tax credit eligibility
    
• Eligibility: Credit ≥ 620, complete homebuyer education, meet income and price limits
  

Other Support & Education Programs

• Homebuyer education courses: Required across most programs (City of Austin, Travis County, TSAHC, TDHCA).
  
• Frameworks CDC, BCL of Texas: free financial and credit counseling.
  
• Individual Development Accounts, Community Land Trusts: matched savings and shared-equity models.
  

How to Apply: Step-by-Step

1. Check eligibility (income, credit, homebuyer status)
   
2. Take homebuyer education → receive certificate
   
3. Compare programs & pick a lender that’s FHA/TDHCA/City‑approved
   
4. Get mortgage pre-approval
   
5. Submit DPA application with financial docs and education certificate
   
6. Close escrow & start occupancy period for loan forgiveness
   

Ready to Take the First Step?

• Download our comprehensive checklist to prepare your documents
  
• Speak with a HUD-approved counselor—schedule your homebuyer education class today
  
• Connect with a preferred lender and explore personalized options now
  

FAQ

Read Next

• A Quick Mortgage: Your Path to Homeownership
• Introduction to Reverse Mortgage Understanding the Basics
  

Conclusion

Austin offers meaningful programs and incentives for first-time homebuyers—up to $40,000 in forgivable assistance, tax credits, and financial education. With the right strategy and timely action, homeownership doesn’t have to be out of reach.

Get started today:

• Register for homebuyer education
  
• Check eligibility and income caps
  
• Consult an approved lender and kickstart your journey!
  

Remember, knowledge and preparation are your greatest allies in navigating Austin’s booming housing market. With the right support, you could soon be moving into your very first home.