Yes, there are real homebuyer grants in Texas, but fewer than the ads suggest, and most of what gets called a "grant" is actually a forgivable or deferred second lien. The clearest true grant I can offer in the Fort Worth area is TSAHC's grant option: up to 5% of your loan amount toward the down payment and closing costs that, in TSAHC's words, never has to be repaid. You'll need to meet TSAHC's income limits, a 620 minimum credit score (640 on conventional loans), homebuyer education, and the rules of the first mortgage, and the program has to have funding when we reserve it.
Below I'll explain how to tell a real grant from a forgivable loan, who's allowed to give one, what's available in Texas, how the money reaches closing, and the "grant" offers that aren't what they seem.
A true grant has a few traits:
The grant agreement controls. Some say the money is never owed back. Others say that if you sell, refinance or move out before a certain date, part or all of it comes due. In that second case, the "grant" behaves like a forgivable loan, and it may be secured by a recorded lien. Read that clause before you call the money free.
Two questions sort most programs quickly: "Is anything recorded against the house?" and "Is anything ever owed back?"
The Texas State Affordable Housing Corporation offers up to 5% of the loan amount through a participating lender, and you choose between a grant that never has to be repaid, a deferred forgivable second lien forgiven after three years if you don't sell, refinance or move out, or a deferred repayable second lien (TSAHC down payment assistance). It runs through two programs: Homes for Texas Heroes, for specific public-service professions and veterans, and Home Sweet Texas, which is income-based for any profession. Both serve first-time and repeat buyers. TSAHC's minimum credit score is 620 on FHA, VA and USDA loans and 640 on conventional, with no maximum DTI on an automated approval (TSAHC homebuyer programs). For Tarrant County, TSAHC's assistance-only income limit with a government loan is $165,450 for Home Sweet Texas and $187,510 for Heroes, from TSAHC's limits file dated Oct 15, 2026. Full details are in how TSAHC's programs work.
TDHCA's My First Texas Home and My Choice Texas Home offer assistance as either a 30-year deferred repayable second or a 3-year deferred forgivable second, both at 0%. Neither is a grant, though the forgivable option ends up costing nothing if you stay put and current for three years. TDHCA's matrix also lists bonus gift funds from a few local housing finance corporations, but the published service areas are Capital Area (Austin region counties), Harris County and the City of McKinney. Tarrant County isn't on that list (TDHCA My First Texas Home matrix, published Aug 17, 2026). See how TDHCA's programs work.
Some employers offer homebuying help to their own workers, sometimes as a grant and sometimes as a forgivable or repayable loan. Some cities, counties, nonprofits and Federal Home Loan Bank member banks run grant programs too. Each has its own income limits, price limits, education requirement, service area and funding calendar, and each approves its own lenders. I verify any local program separately before I'd suggest building an offer around it.
TSAHC and TDHCA assistance is available through me where their current published guidelines allow it for your loan type. Your eligibility, the program's funding that week, and the rules for the option you choose still have to check out, and I'll confirm those up front.
Seller-funded grants were a real product years ago. A seller would donate to a nonprofit, the nonprofit would hand the same amount to the buyer as a "gift," and the seller would raise the price to cover it. Congress shut that down for FHA, and today the National Housing Act, section 203(b)(9)(C), bars the buyer's minimum investment from coming from the seller or anyone who benefits from the sale, which HUD's handbook repeats (II.A.4.d.ii).
Fannie Mae addresses the same idea from another direction: money that flows from an interested party through a nonprofit or other third party is still an interested party contribution, and it can't be used for the down payment (B3-4.1-02). The name on the check doesn't settle the question. The underwriter traces where the money started and why it's being given.
Most grant programs send funds directly to the title company, not to you. The program issues a commitment before closing, I include it in the file, and the title company receives the wire and applies it on the settlement statement. The grant then shows on the Closing Disclosure as a credit toward your cash to close, and the amount should match the award.
A grant deposited into your own account weeks before closing creates more work. The underwriter has to see the award letter, the deposit and the donor's side of the transfer. Programs that wire straight to title avoid that. And if a grant comes in short or late, you have to cover the difference from acceptable funds, so know the exact amount and funding date well before closing.
This example is made up to show how the rules apply.
Ana is a paramedic in Haltom City with a 655 middle score and income under TSAHC's Heroes limit for Tarrant County. A builder advertises a "down payment grant" for buyers who use its preferred lender, but the money comes from the builder. On her FHA loan, that's an interested party contribution: it can go toward allowed closing costs within FHA's limit, but it can't be her Minimum Required Investment. TSAHC's grant can be. She picks the grant over the forgivable second because she may relocate in two years, and a forgivable second would come due if she sold before three years. She still needs underwriting approval and TSAHC funding available when her loan is reserved.
Want to know whether you'd qualify for TSAHC's grant, or whether a forgivable second makes more sense for your plans? I'll check your eligibility and current funding before you shop. Book a call, or when you're ready, start an application.
Links checked Oct 21, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026