How to Buy a House in Texas with No Down Payment (2026)

Can You Really Buy a House in Texas with No Down Payment?

Yes, you can buy a house in Texas with no down payment in 2026 — and it is more accessible than most people realize. Between federal zero-down loan programs like VA and USDA loans, state-funded down payment assistance through TDHCA and TSAHC, and city-level programs in Austin, Houston, and San Antonio, there are at least six distinct paths to homeownership that require zero cash for a down payment.

The phrase "no down payment" does need a reality check, though. While the down payment itself can be $0, you will almost certainly have other out-of-pocket costs: closing costs, an option fee, a home inspection, and an appraisal. We will cover exactly what those costs look like later in this guide. But the biggest barrier most first-time buyers face — saving $15,000 to $60,000 for a traditional down payment — can be eliminated entirely with the right program.

Texas is one of the most buyer-friendly states for down payment assistance. The combination of no state income tax, relatively affordable housing compared to coastal markets, and a deep roster of state and local assistance programs makes it genuinely possible for a buyer earning a median income to purchase a home without years of saving. Use our home affordability quiz to see where you stand before diving into specific programs.

Here is a quick overview of every zero-down and low-down option available in Texas:

What Are VA Loans and How Do They Work in Texas?

VA loans are the single best mortgage product available in the United States — and Texas has the second-largest veteran population in the country. If you are an eligible veteran, active-duty service member, National Guard or Reserve member, or surviving spouse of a veteran, the VA loan is almost certainly your best path to homeownership with zero down payment.

Here is what makes VA loans exceptional:

• $0 down payment: No down payment required on any loan amount. There is no maximum loan amount for borrowers with full entitlement.
• No PMI: Unlike every other low-down-payment option, VA loans do not require private mortgage insurance. This alone saves $100-$300 per month on a typical Texas home.
• Lower interest rates: VA loan rates are typically 0.25-0.5% lower than conventional rates because the VA guaranty reduces lender risk. On a $350,000 loan, that rate difference saves $50-$100 per month.
• No prepayment penalty: You can pay off or refinance the loan at any time without fees.
• Lenient credit requirements: The VA itself does not set a minimum credit score. Most lenders require 580-620, which is significantly more flexible than conventional loans.
• VA funding fee: In lieu of PMI, VA loans charge a one-time funding fee (typically 2.15% for first-time use with $0 down). This can be financed into the loan. Veterans with service-connected disabilities are exempt from the funding fee entirely.

To qualify, you generally need at least 90 days of active-duty service during wartime, 181 days during peacetime, or 6 years in the National Guard or Reserves. You will need to obtain a Certificate of Eligibility (COE) from the VA, which your lender can pull electronically in minutes.

Texas is home to major military installations including Fort Cavazos (formerly Fort Hood) near Killeen, Joint Base San Antonio, Fort Bliss in El Paso, and Naval Air Station Corpus Christi. If you are stationed at or near any of these bases, VA loans are designed for exactly your situation. For a deeper dive into VA-specific strategies, read our Texas VA Loan Home Buying Guide.

Which Texas Suburbs Qualify for USDA Zero-Down Loans?

USDA Rural Development loans are the other true zero-down-payment option, and they are far more accessible in Texas than most buyers realize. The word "rural" is misleading — USDA eligibility maps include many suburban communities that are well within commuting distance of major Texas metros.

USDA loan highlights:

• $0 down payment: 100% financing with no down payment required.
• Low guarantee fee: Instead of PMI, USDA loans charge an upfront guarantee fee of 1% (financed into the loan) and an annual fee of 0.35% of the loan balance — significantly cheaper than FHA mortgage insurance.
• Competitive rates: USDA rates are comparable to conventional rates and sometimes lower.
• Income limits: Your household income cannot exceed 115% of the area median income. For most Texas counties, this limit is approximately $103,500 for a 1-4 person household (2026 figures).
• Minimum credit score: 640 for automated approval through the GUS (Guaranteed Underwriting System). Scores below 640 require manual underwriting, which is slower and stricter.

The key question is whether the property you want to buy is in a USDA-eligible area. Here are some popular Texas suburbs that currently qualify for USDA loans:

Austin Metro USDA-Eligible Areas

• Kyle — 20 minutes south of downtown Austin, growing rapidly with median home prices around $320,000
• Buda — Just south of Kyle, family-friendly with excellent Hays CISD schools
• Liberty Hill — Northwest of Austin, popular with families seeking new construction in the $300K-$450K range
• Jarrell & Florence — North of Austin along I-35, some of the most affordable options in the metro
• Bastrop — East of Austin, charming downtown with a small-town feel and growing job market

San Antonio Metro USDA-Eligible Areas

• New Braunfels — Between Austin and San Antonio on I-35, one of the fastest-growing cities in the U.S.
• Seguin — East of San Antonio, affordable homes and a growing economy
• Floresville — South of San Antonio, quiet suburban living with USDA eligibility

Houston Metro USDA-Eligible Areas

• Willis & Conroe — North of Houston, near The Woodlands with rapid suburban growth
• Waller — Northwest of Houston, rural character with suburban amenities
• Needville & Fulshear — Southwest of Houston, growing communities in Fort Bend County

Check the USDA eligibility map at eligibility.sc.egov.usda.gov by entering the property address. Eligibility can change when areas are reclassified, so always verify before making an offer. Areas within Austin, Houston, San Antonio, and Dallas city limits are generally not eligible, but many surrounding suburbs are.

What Is the TDHCA My First Texas Home Program?

The Texas Department of Housing and Community Affairs (TDHCA) operates two major down payment assistance programs that are among the most generous in the country. These programs work by providing a second lien (a subordinate loan) that covers your down payment and potentially some closing costs.

My First Texas Home

Designed for first-time home buyers (defined as not having owned a home in the past three years), the My First Texas Home program provides:

• Up to 5% DPA as a 30-year deferred, forgivable second lien — meaning you never have to repay it if you stay in the home and maintain it as your primary residence
• Below-market interest rates on the first mortgage through TDHCA-approved lenders
• Can be paired with FHA, VA, or USDA first mortgages
• Purchase price limits that vary by county — typically $350,000-$500,000 depending on the metro area
• Income limits based on household size and county — generally $98,000-$120,000 for a family of 1-2
• Minimum 620 credit score
• Homebuyer education course required (available online for $0-$99)

My Choice Texas Home

The My Choice Texas Home program is identical in structure to My First Texas Home, with one critical difference: it is available to repeat buyers. You do not need to be a first-time buyer to qualify. This makes it one of the only DPA programs in Texas available to people who currently own or have recently owned a home.

The same income limits, credit score requirements, and purchase price caps apply. The DPA amount is also up to 5% of the loan amount provided as a second lien. If you sold a home and are buying again but lack the cash for a down payment, My Choice Texas Home can bridge that gap.

To access either TDHCA program, you must work with a TDHCA-approved lender. Not every mortgage company participates, so this is an important detail to confirm early in the process. Ask your lender directly: "Are you approved to originate TDHCA loans?" If the answer is no, find one who is. A list of participating lenders is available on the TDHCA website. For more on navigating the first-time buyer process, see our First-Time Home Buyer Texas 2026 Guide.

How Do TSAHC Grants and Loans Work?

The Texas State Affordable Housing Corporation (TSAHC) operates separately from TDHCA and offers its own suite of down payment assistance programs. TSAHC programs are particularly attractive because some options provide outright grants that never need to be repaid.

TSAHC Homes for Texas Heroes

Available to teachers, first responders (firefighters, EMS, police, corrections officers), veterans, and healthcare workers employed in Texas. This program provides:

• Up to 5% DPA as a grant (free money — no repayment required) or as a 0% interest, deferred second lien
• Below-market mortgage rates on the first lien
• Available to first-time and repeat buyers
• Income limits apply — typically similar to TDHCA limits based on household size and county
• Minimum 620 credit score

TSAHC Home Sweet Texas

Available to all Texas home buyers who meet income and purchase price limits (not restricted to specific professions). This program also provides up to 5% DPA as a grant or second lien, with below-market first mortgage rates. First-time buyer status is not required.

The grant option is the standout feature. With a TSAHC grant, you receive free money for your down payment that you never have to repay — no second lien, no deferred balance, no catch. Combined with an FHA or conventional first mortgage, this can bring your total out-of-pocket for the down payment to exactly $0.

What City-Specific DPA Programs Exist in Austin, Houston, and San Antonio?

In addition to state programs, several Texas cities and counties operate their own down payment assistance programs. These can sometimes be layered with state programs for additional assistance, though stacking rules vary.

Austin: Austin Housing Finance Corporation (AHFC)

The City of Austin's AHFC offers down payment assistance of up to $40,000 for buyers purchasing within Austin city limits. The program targets households earning at or below 80% of the area median income (approximately $73,000 for a family of four in 2026). Funds are provided as a 0% interest, deferred loan that is forgiven over time. The program is first-come, first-served and funding rounds open periodically throughout the year — check the AHFC website for current availability.

Houston: Houston Housing Authority & Harris County Programs

Houston and Harris County offer multiple DPA programs through the Houston Housing Authority (HHA) and the Harris County Community Services Department. The Houston Homebuyer Assistance Program (HAP) provides up to $30,000 in down payment and closing cost assistance for income-qualified buyers purchasing within the City of Houston. Harris County offers similar programs for buyers in unincorporated areas and smaller cities within the county. Income limits and fund availability vary — contact the Houston Housing Authority or your TDHCA-approved lender for current details.

San Antonio: San Antonio Housing Authority (SAHA) & Bexar County

The San Antonio Housing Authority and the City of San Antonio offer DPA programs ranging from $10,000 to $30,000 for income-qualified buyers. The Homeownership Incentive Program (HIP) provides forgivable loans for down payment and closing costs. Bexar County also operates DPA programs for residents outside San Antonio city limits. These programs frequently have waiting lists, so apply early.

For buyers interested in specific cities, start your home search on our Austin, Houston, or San Antonio market pages to see what is available in your price range.

Can You Combine FHA or Conventional Loans with DPA for Zero Out of Pocket?

Yes — and this is how most Texas buyers who are not eligible for VA or USDA loans achieve effectively $0 out of pocket for their down payment. Here is how it works:

FHA + Down Payment Assistance

FHA loans require a minimum 3.5% down payment (with a 580+ credit score). On a $300,000 home, that is $10,500. But TDHCA, TSAHC, and city DPA programs can provide that 3.5% as a grant or second lien — meaning you bring $0 of your own money for the down payment.

The trade-off with FHA is mortgage insurance premium (MIP). FHA charges an upfront MIP of 1.75% of the loan amount (financed into the loan) plus an annual MIP of 0.55% of the loan balance. On a $300,000 loan, that is about $137 per month in MIP. Unlike conventional PMI, FHA MIP does not automatically drop off at 20% equity — it stays for the life of the loan unless you refinance into a conventional mortgage later.

Conventional 3% Down + Down Payment Assistance

Conventional loans through Fannie Mae's HomeReady or Freddie Mac's Home Possible programs allow as little as 3% down. On a $300,000 home, that is $9,000. DPA programs can cover this 3% just as they cover FHA's 3.5%.

Conventional loans require private mortgage insurance (PMI) when you put less than 20% down, but PMI on conventional loans has two advantages over FHA MIP: the rate is often lower (especially with higher credit scores), and it automatically cancels when your loan-to-value ratio reaches 78%. You can also request cancellation at 80% LTV.

For many buyers, the conventional + DPA combination is actually cheaper long-term than FHA + DPA because of the lower insurance costs and the ability to drop PMI. Run the numbers both ways with your lender. Our mortgage calculator can help you compare monthly payments.

What Credit Score and Income Do You Need for Each Program?

Credit score and income requirements vary significantly by program. Here is a detailed breakdown:

A few critical notes on credit scores: While most DPA programs require a 620 minimum, your interest rate improves dramatically at 680, 720, and 740+. A buyer with a 620 score will qualify but may receive a rate 0.5-1.0% higher than a buyer with a 740 — which on a $300,000 loan translates to $100-$200 more per month. If your score is in the 580-640 range, spending 3-6 months improving it before applying can save you tens of thousands over the life of the loan.

Income limits are based on total household income, not just the borrower's income. If you and your spouse both earn $55,000, your household income is $110,000, which may exceed limits for some programs. Non-borrowing household members' income can also count for USDA loans, which catches many buyers off guard.

How Much Does PMI Cost When Putting Less Than 20% Down?

Private mortgage insurance is the ongoing cost of putting less than 20% down on a conventional loan. It protects the lender if you default — it does not protect you. But it is the price of admission for low-down-payment homeownership, and understanding the cost helps you plan your real monthly budget.

PMI rates vary based on your credit score, down payment percentage, and loan amount. Here is what to expect on a $300,000 loan:

As the table shows, the PMI cost difference between a 620 credit score and a 760+ score is staggering — potentially $300+ per month on the same loan. This is why we recommend improving your credit before applying if your score is below 680.

VA loans have no PMI at all, which is one of the reasons they are the best zero-down option when available. USDA loans charge a lower guarantee fee (0.35% annual) that functions similarly to PMI but is significantly cheaper. FHA mortgage insurance (0.55% annual) falls between PMI and USDA fees in cost.

The good news: conventional PMI is temporary. Once you reach 20% equity through payments, appreciation, or a combination, you can have it removed. Many Texas buyers who purchased in recent years have already reached 20% equity due to strong appreciation — if you think you might be there, ask your lender about a PMI removal appraisal.

What Are the True Out-of-Pocket Costs Even with No Down Payment?

This is the section most "no down payment" guides skip, and it is the one that matters most for your planning. Even when your down payment is fully covered by a VA loan, USDA loan, or DPA program, you will still face several out-of-pocket costs during the home buying process.

Costs You Will Likely Pay

Closing costs are the largest out-of-pocket expense and typically run $6,000-$15,000 on a Texas home purchase. They include lender fees, title insurance, escrow setup, recording fees, and prepaid property taxes and insurance. However, you have options to reduce or eliminate this cost:

• Seller concessions: You can negotiate for the seller to pay a portion of your closing costs. FHA allows up to 6% of the purchase price in seller concessions, VA allows up to 4%, and conventional allows 3-6% depending on the down payment.
• Lender credits: Some lenders offer credits toward closing costs in exchange for a slightly higher interest rate. This reduces your upfront costs but increases your monthly payment.
• DPA programs that cover closing costs: Some TSAHC and city programs can be applied to closing costs in addition to the down payment.
• Gift funds: FHA, VA, and conventional loans all allow gift funds from family members to cover closing costs.

A realistic budget for a buyer using a zero-down-payment program on a $300,000 Texas home: expect $3,000-$8,000 in total out-of-pocket costs if you negotiate well, or potentially under $1,500 if you secure strong seller concessions and use a DPA program that covers closing costs.

Is Buying with No Down Payment Actually a Good Idea?

We believe in giving you honest advice, not just telling you what you want to hear. Buying with no down payment is a legitimate path to homeownership, and it can be the right decision — but it comes with real trade-offs you should understand before committing.

The Case for Buying with No Down Payment

• Build equity sooner: Every month you rent, you are building someone else's equity. Even with a higher monthly payment, homeownership allows you to build your own wealth through principal payments and appreciation.
• Lock in today's price: In growing Texas markets, waiting 2-3 years to save a full down payment could mean paying $30,000-$50,000 more for the same home. The math often favors buying now with $0 down over waiting to save 20%.
• Preserve cash reserves: Keeping your savings liquid provides a safety net for emergencies, repairs, and unexpected expenses — which are more likely as a homeowner.
• Tax benefits begin immediately: Mortgage interest and property tax deductions start the day you close, regardless of your down payment amount.

The Case Against (or at Least the Honest Risks)

• Higher monthly payments: Financing 100% of the purchase price means a larger loan balance. On a $300,000 home at 6.5%, a 0% down buyer pays about $1,896/month in principal and interest versus $1,517/month with 20% down — a difference of $379/month.
• More total interest: Over 30 years, the 0% down buyer pays approximately $382,560 in total interest versus $306,120 with 20% down — about $76,000 more. (Though most people refinance or move well before 30 years.)
• No equity cushion: With 0% down, you start with zero equity. If home values decline even slightly, you could be "underwater" — owing more than your home is worth. This limits your options if you need to sell or refinance.
• PMI adds cost: Unless you have a VA loan, you will pay PMI or MIP on top of your mortgage payment, adding $100-$300+ per month depending on your credit score and loan type.
• Competitive disadvantage: In a competitive market, sellers may prefer offers with larger down payments because they signal financial strength and lower risk of financing falling through.

Our recommendation: If you have stable income, plan to stay in the home for at least 3-5 years, and can maintain a 3-6 month emergency fund after closing, buying with no down payment is a reasonable strategy — especially if the alternative is continuing to rent while home prices rise. But if you are stretching to the absolute maximum of what you can afford, consider whether a less expensive home or a few more months of saving might put you in a stronger position. Use our home affordability quiz to see where you stand.

What Are the Steps to Buy a House in Texas with No Down Payment?

Here is your step-by-step action plan, from today to closing day:

Step 1: Check Your Credit Score and Eligibility (Week 1)

• Pull your free credit reports from AnnualCreditReport.com and check your FICO score
• Determine which programs you may qualify for: VA (military service?), USDA (suburban location?), TDHCA/TSAHC (income within limits?), city programs (buying within city limits?)
• If your score is below 620, focus on credit improvement before applying — pay down credit card balances, dispute errors, and avoid new credit applications

Step 2: Find a DPA-Experienced Lender (Week 1-2)

• Not all lenders originate DPA loans. Ask specifically: "Are you approved to originate TDHCA and TSAHC loans?"
• Get pre-approved — this tells you exactly how much house you can afford and which programs you qualify for
• Compare quotes from at least 2-3 lenders. Rates and fees vary, even on the same DPA programs

Step 3: Complete Homebuyer Education (Week 2-3)

• Most DPA programs require a HUD-approved homebuyer education course
• Online options are available and typically take 4-8 hours
• Complete this early — it is a requirement before closing and some lenders want it done before pre-approval

Step 4: Connect with a Real Estate Agent (Week 2-3)

• Work with an agent experienced in DPA transactions — the process has nuances that not every agent understands
• Your agent should know how to write offers that include seller concession requests and DPA addendums
• Connect with our first-time buyer specialists who work with DPA programs daily

Step 5: Find Your Home and Make an Offer (Week 3-8)

• Search within your pre-approved price range and within program geographic requirements
• For USDA loans, verify the property address is in an eligible area before touring
• When making an offer, include a request for seller-paid closing costs (3-6% depending on loan type)
• Expect the process to take longer than a cash or conventional offer — DPA loans typically close in 30-45 days versus 21-30 for conventional

Step 6: Complete Due Diligence and Close (Week 8-12)

• Get a home inspection ($350-$600) — never skip this, even on new construction
• The appraisal will be ordered by your lender ($400-$700)
• Provide all documentation your lender requests promptly — DPA loans require additional paperwork
• Review your closing disclosure 3 business days before closing to confirm your out-of-pocket costs
• Bring a cashier's check for any remaining out-of-pocket costs (or arrange a wire transfer) and close on your new home

Frequently Asked Questions

Can you buy a house in Texas with no down payment? +

Yes. You can buy a house in Texas with zero down payment through VA loans (for eligible veterans and active-duty military), USDA loans (for homes in eligible rural and suburban areas), or by combining an FHA or conventional loan with a down payment assistance program from TDHCA, TSAHC, or local city programs. These programs can cover your entire down payment, making it possible to purchase with no money down.

What credit score do you need to buy a house with no down payment in Texas? +

VA loans have no official minimum credit score from the VA, but most lenders require 580-620. USDA loans typically require a minimum 640 credit score for automated approval. FHA loans with down payment assistance require a minimum 620-640 credit score depending on the DPA program. TDHCA's My First Texas Home program requires a minimum 620 credit score.

What are the income limits for Texas down payment assistance programs? +

Income limits vary by program and county. TDHCA's My First Texas Home program sets limits based on household size and county — typically $98,000-$120,000 for a family of 1-2 in most Texas metros. TSAHC programs have similar income limits. USDA loans set income limits at 115% of the area median income, which is approximately $103,500 for a family of 1-4 in most Texas counties. Check each program's current limits as they are updated annually.

Do you still have to pay closing costs with no down payment in Texas? +

Yes. Even with a zero-down-payment loan, you will still owe closing costs (typically 2-5% of the purchase price), an option fee ($100-$500), and home inspection costs ($350-$600). However, you can negotiate for the seller to pay closing costs, use some DPA programs that cover closing costs in addition to the down payment, or roll closing costs into the loan in some cases. Budget $3,000-$8,000 for out-of-pocket costs on a typical Texas home purchase.

Is it a good idea to buy a house with no down payment? +

Buying with no down payment allows you to become a homeowner sooner and start building equity, but it comes with trade-offs. You will have a higher monthly payment, pay more interest over the life of the loan, and start with zero equity — meaning you are vulnerable to being underwater if home values decline. You may also pay PMI (except on VA loans), adding $100-$300 per month. It can be a smart move if you have stable income and plan to stay in the home long-term, but you should be honest about the higher costs involved.

Ready to Buy with No Down Payment?

Our agents specialize in DPA programs across Texas. We will connect you with approved lenders, guide you through the application, and help you close with minimal out-of-pocket costs.

Get Started - First-Time Buyers Call (512) 640-9967