Yes, down payment help exists for a new build, but most programs were designed for buying a finished home, so it takes planning. The two state agencies, TDHCA and TSAHC, offer up to 5% of the loan, often as a second lien, through approved lenders. A few Valley cities add local money. And land you already own often does the same job, with no second lien at all.
We are a builder, not a lender. Programs, funding and limits change, and only the program or a participating lender can confirm what you qualify for.
Why is a new build different?
Assistance is usually paid when a permanent mortgage closes on a home you will live in soon after. TDHCA’s My First Texas Home, for example, requires occupancy within 60 days of closing. That does not line up with a one time close loan, which closes months before the house exists.
The route that fits is usually a two time close: a short term construction loan, then a permanent loan with the assistance when the home is finished. TDHCA’s lender guide allows its permanent loan to refinance a construction loan with an original term of two years or less, and lets lenders reserve funds with a signed construction contract. We did not find a TDHCA rule on one time close loans, so ask your lender directly.
The trade off is real: two closings, and your permanent rate is set at the end of the build, not the start. Our guide to construction loan rate locks explains what that exposure means.
What do the state programs offer?
| My First Texas Home | My Choice Texas Home | Home Sweet Texas | Homes for Texas Heroes | |
|---|---|---|---|---|
| Run by | TDHCA | TDHCA | TSAHC | TSAHC |
| Who it serves | First time buyers; veterans and targeted tracts are exempt from that rule | No first time buyer rule | Buyers within the income limits | Listed professions, such as teachers, police, nurses and veterans |
| Help | 2% to 5% of the loan | Ask the lender | Up to 5% of the loan | Up to 5% of the loan |
| Form | 0% second lien, deferred 30 years or forgiven after 3 | Ask the lender | Grant, or a second lien forgiven after 3 years | Same as Home Sweet Texas |
| Minimum credit | 620 | Ask the lender | 620 on government loans, 640 on conventional | Same as Home Sweet Texas |
Sources: TDHCA program matrix and TSAHC. My First Texas Home works with FHA, VA and USDA loans. We could not confirm from TSAHC whether its programs accept new construction, so ask before you plan around them.
What are the 2026 income limits?
TDHCA’s limits, effective July 13, 2026, for Hidalgo, Cameron, Starr and Jim Wells counties:
| Program | Income limit | Price limit |
|---|---|---|
| My First, 1 or 2 people | $101,500 | $566,354 |
| My First, 3 or more | $116,725 | $566,354 |
| My First, targeted tracts | $121,800 or $142,100 | $692,211 |
| My Choice with FHA, VA or USDA | $172,550, any household size | No program limit |
| My Choice conventional, Hidalgo | $51,200 or $108,800, depending on the option | No program limit |
| My Choice conventional, Cameron | $51,680 or $109,820, depending on the option | No program limit |
| My Choice conventional, Starr and Jim Wells | $66,960 or $142,290, depending on the option | No program limit |
Notice how far apart those numbers are. In Hidalgo County, the loan type can decide whether you qualify at all. TSAHC sets its limits at 150% of area income for Home Sweet Texas and 170% for Homes for Texas Heroes, and publishes the dollar figures on its county calculator.
Which local programs are open?
| Program | Area | What it offers | Status when we checked |
|---|---|---|---|
| Brownsville homebuyer assistance | Brownsville city limits, outside high risk flood zones | 0% deferred loan up to $25,000; income at 80% of area median or below; credit 600; new or existing homes | 2026 brochure published; confirm funds and whether it covers your own lot |
| McAllen HOME funds | City of McAllen | The city’s 2025 to 2026 plan proposed about $352,000 for down payment assistance and $100,000 for new construction, through Affordable Homes of South Texas | Ask for the current year and the amount per household |
| Hidalgo County HOME | Hidalgo County | Homebuyer assistance | The county’s page says it is frozen by funding cuts; call to confirm |
| FHLB Dallas HELP | Texas, through member banks | Up to $25,000; income at 80% of area median or below; first time buyers; five year retention | 2026 funds were at $0 on September 15; watch for the next round |
We did not find active programs for Edinburg, Mission, Pharr, Harlingen or Cameron County. That does not prove none exist, so call the city’s community development office.
What about USDA Direct?
USDA runs two very different loans. The Guaranteed loan goes through private lenders. The Section 502 Direct loan is made by USDA itself for low income households without other credit, and USDA says the funds “can be used to build, repair, renovate, or relocate a home.” The home must be modest and within the area loan limit, and the address must be eligible. Self help groups, such as Proyecto Azteca in San Juan, help families build under USDA programs, with the family’s own labor as part of the deal.
Can family or the builder help with closing costs?
Family gifts are generally allowed, with paper trail rules that vary by loan. Separately, each program caps what interested parties, such as a seller or builder, can contribute:
| Loan | Cap on interested party contributions |
|---|---|
| FHA | 6% of the sales price |
| USDA | 6% of the sales price |
| Conventional | 3%, 6% or 9%, depending on loan to value |
| VA | About 4%; ask your lender how it is measured |
These go toward closing costs, not the down payment. A builder cannot be the donor of a gift on a conventional or USDA loan.
What about the land you already own?
For many Valley families this is the best down payment help there is. If you own your lot, its appraised value can often count toward the down payment on a construction loan, with no second lien and no program limits to meet. See our guide to building on your own land and our loan comparison.
What do people get wrong?
- It is not always free money. TDHCA’s deferred option is a second lien, due when you sell, refinance or pay off the loan. Read which version you are getting.
- There is no single income limit. The limit changes with the program, the loan type and the county.
- Listed does not mean open. Local funds run out and programs pause. Call before you plan around one.
How do I start?
- Get prequalified, and ask the lender two questions: are you approved for TDHCA or TSAHC, and do you close construction loans?
- Ask how the assistance fits your loan structure, and what it adds in closing costs.
- Call any local program to confirm it has funds this year and covers a home built on your lot.
- Bring the answers to us, and we will line up the budget, the contract and the schedule with your lender.
Ready to find your number? Get prequalified or schedule a consultation.
Frequently asked questions
Can I use down payment assistance with a one time close loan?
Possibly, but do not assume it. The programs we reviewed are built around a permanent loan on a home you will soon occupy, which usually points to a two time close. Your lender can confirm.
Do I have to pay the assistance back?
It depends on the program. Some forms are forgiven after a set period if you keep the home; others stay as a second lien until you sell, refinance or pay off the mortgage.
Can veterans use these programs?
Yes. TDHCA’s My First Texas Home waives its first time buyer rule for qualified veterans, and Homes for Texas Heroes includes veterans. Our guide for veterans building in Texas covers the rest of your benefits.
Does assistance replace the loan program?
No. It sits on top of a first mortgage, so you still have to qualify for the FHA, VA, USDA or conventional loan underneath.
