Down Payment Assistance in Texas: What Frisco Homebuyers Can Access in 2026

The number one reason first-time homebuyers in the DFW area tell me they are not ready to buy is the down payment. They have looked at homes in Frisco, McKinney, or Plano TX, done the math on 20% down, and concluded they are years away from being ready. Here is what I tell every single one of them: you do not need 20% down. You likely do not need 10% down. And depending on your situation, you may be able to buy a home in North Texas with far less out of pocket than you think.

The 20% Down Myth

The 20% down payment figure exists for one reason: to avoid private mortgage insurance on a conventional loan. That is it. It is not a requirement. It is not a law. The national median down payment for first-time homebuyers is currently around 8% — and with the programs available in Texas, many buyers are getting in for 3%–5% down or less.

TSAHC — Texas State Affordable Housing Corporation

TSAHC offers down payment assistance grants of 3% to 5% of the loan amount for eligible Texas homebuyers. These are true grants — not second liens, not loans that need to be repaid. The money is yours at closing. On a $400,000 home purchase in Frisco TX, a 5% TSAHC grant provides $20,000 toward your down payment and closing costs.

TSAHC grants work with both FHA loans and conventional loans in Texas. They can also be paired with a Mortgage Credit Certificate (MCC), which provides a dollar-for-dollar federal income tax credit on a portion of the mortgage interest you pay every year you live in the home — worth hundreds of dollars annually.

Eligibility: minimum 620 credit score, income limits that vary by county. In Collin County — covering Frisco, McKinney, Plano, Allen, and Prosper — the income limits are set higher than many other Texas counties to reflect the local cost of living. Many DFW buyers who assume they earn too much to qualify actually do qualify.

TDHCA — My First Texas Home

The Texas Department of Housing and Community Affairs offers a 30-year fixed-rate mortgage paired with down payment assistance of up to 5% of the loan amount. The assistance comes as a second lien that is forgivable over time — if you stay in the home, you effectively never pay it back. This program is available to both first-time homebuyers AND veterans across Texas.

Fannie Mae HomeReady and Freddie Mac Home Possible

Both programs allow down payments as low as 3% with reduced private mortgage insurance rates for buyers at or below the area median income in DFW. The PMI reduction is meaningful — often 30%–40% less than standard PMI — which makes the monthly payment on a 3%-down purchase more affordable than most buyers expect.

What About Closing Costs?

Closing costs on a home purchase in North Texas typically run 2%–3% of the loan amount — another $8,000–$12,000 on a $400,000 purchase. Strategies to cover them: seller concessions negotiated into the purchase contract, lender credits, and certain DPA programs that cover closing costs in addition to down payment.

A Real Example for a Frisco TX Homebuyer

A first-time buyer in Frisco TX with a $420,000 purchase price, household income of $95,000, and a 680 credit score. With a TSAHC grant at 5%: $21,000 in grant funds covers the down payment and most closing costs. Out-of-pocket at closing could be as low as $3,000–$5,000 depending on how the transaction is structured.

Important note on rates: these programs are available through multiple lenders — but as an independent mortgage broker in Frisco TX without big-bank overhead, I pair these programs with rates that are typically more aggressive than what the big retail lenders offer. The program benefit and the rate advantage together create a genuinely powerful combination for DFW first-time buyers.

"Do not assume you are not ready before you call me. I have helped buyers close on homes in Frisco TX with under $5,000 out of pocket."

Call (214) 336-5840.