Frequently Asked Questions

What is Down Payment Assistance or DPA?

Common Types of DPA:

Which Down Payment Assistance Type is Best for Me?

Common types of DPA:

Please note: While ITIN borrowers are not eligible to use TSAHC’s DPA programs, they may be eligible for an MCC, as long as they meet all program requirements.

Yes, the lender does need to be an approved, participating lender with TSAHC in order to receive our DPA and/or MCC assistance. You can find a list of approved lenders by visiting our “Find a Lender” page.

Here we highlight those we trust in the following ways:

Top Performing Loan Officers – those that have helped the most Texas families use our programs and are highly knowledgeable. These lenders are updated every quarter.

Top Peforming Loan Officers by Region – those that are considered the top loan officer for their region of Texas. These lenders are the top 3 for their region and remain the same all year long. They are considered the local expert on the TSAHC programs.

Preferred Loan Officers by County – those that have helped at least 4 Texas families use our programs in the last year. New loan officers are added to this category every month.

Approved Mortgage Companies – this is a full list of the approved mortgage companies. Technically, any loan officer working for one of these companies can help you access our assistance. Should they not be familiar with our program, feel free to put them in touch with us so that we may get them trained and up to speed.

Yes, as long as you intend to make the property you purchase with our assistance your primary residence within 60 days, you may apply for and receive our assistance.

The best way to get started with our program is to click here and take our eligibility quiz. Once you do that, if the result indicates you qualify (we do require a credit score of 620 or higher for our grant), the next step is to contact one of the approved lenders listed on our website.  Only our approved lenders can offer our programs as they are trained as experts in helping homebuyers navigate submitting the required documents and loan application.

We do not take any applications or documents from borrowers directly but rather work behind the scenes training our approved loan officers to work with potential borrowers.  Just call or email one of our approved loan officers and say you found their name on TSAHC’s website and would like to find out more about using our down payment assistance (DPA) grant and/or mortgage credit certificate (MCC) program.  The loan officer will take it from there, help you get started and answer all your questions!

1. Here’s the eligibility quiz: https://www.tsahc.org/resource/path-finder-quiz/ 
2. Here’s our approved lenders by county: https://www.tsahc.org/lenders-realtors/find-a-lender/

DTI stands for debt-to-income, also referred to as the back-end debt ratio.

It shows how much of your gross monthly income is needed to cover all your debt obligations.

Follow these steps to determine your approximate DTI:

1. Add up all your debt (including your mortgage, car loans, child support and alimony, credit card bills, student loans, etc.).
2. Divide this amount by your monthly gross income.
3. Then multiply this amount by 100. This percentage is your DTI.

Please keep in mind that you must also meet specific underwriting standards. The mortgage lender can help you better understand FICO credit score and maximum back-end debt ratio requirements, as well as any other standards that may apply.

For Down Payment Assistance (DPA) or MCC/DPA programs:

FHA Loans, VA or USDA-RHS Loans

Home buyers must have a minimum FICO score of 620. Please note, home buyers with a FICO score of 620-639 will be charged a .50% origination fee. Manual underwriting is acceptable for FHA loan files with a minimum 640 FICO score and maximum Debt to Income (DTI) ratio of 43%

Conventional Loans

Home buyers must have a minimum FICO score of 640 to qualify for the forgivable second lien DPA.  No maximum DTI requirements will apply to any loan using DPA or MCC/DPA program that receives an automated underwriting approval.

Please note:

If you have bad credit, we have a great network of housing counselors that are ready and willing to help (many times at no charge) you meet your homeownership goals. Visit our Texas Financial Toolbox to find a counselor near you.

If you have no credit, please reach out to a TSAHC lender as you still may qualify to use our DPA program.

See related article:

 What Is Debt to Income (dti)?

The lender through which you received your mortgage can help you obtain a copy of your MCC. Please reach out to them directly for assistance.

For any additional questions, please feel free to email [email protected].

You may be subject to Recapture tax if you decide to sell your home within 9 years. See details about Recapture Tax here. If you move, but decide to keep your home and rent it out, you simply will not be able to take the credit any longer. You must live in the home as your primary residence to continue to take the credit.

Yes, but you must apply for a reissued Mortgage Credit Certificate (MCC) from TSAHC.  The refinance loan must meet certain requirements to qualify for a reissued MCC.

Please find the MCC Reissuance Application here:

Request a Reissued MCC

Yes. We consider your income for eligibility purposes only when you first apply for the Mortgage Credit Certificate (MCC).

Your lender will consider income from all family members listed on the deed of trust to determine income eligibility for a Mortgage Credit Certificate (MCC). This includes income from a non-purchasing spouse. However, it would not include income from those that will not end up on the deed of trust. For example, if an 18 year old is working at the grocery store or if grandma is living with you and receiving social security.

If you have a Mortgage Credit Certificate (MCC), you can take a tax deduction for any additional interest paid above the value of the tax credit.  For example, if you paid a total of $7,500 in mortgage interest in one year, you would be able to take an MCC tax credit of $1,500 (20% of the mortgage interest paid).  You would also be able to take an itemized tax deduction for the remaining $6,000 in mortgage interest paid.

View the video for more information.

As long as you meet all of the requirements of both programs, you can use TSAHC’s Mortgage Credit Certificate (MCC) and Down Payment Assistance (DPA) together. In fact, the MCC can ONLY be used in conjunction with our DPA and No-DPA (0%) programs until further notice. The stand-alone MCC will be discontinued indefinitely.

To apply for a Mortgage Credit Certificate (MCC), you must work with one of TSAHC’s approved lenders.  The lender will help you fill out the application and ensure that you meet all of the requirements.  Click here to find a participating lender in your area. Please note that until further notice, the MCC program can ONLY be used in conjunction with our DPA(down payment assistance) and No-DPA (0%) programs.

Please note that you must apply for the MCC BEFORE you close on your home loan.  You cannot apply for the MCC after your loan has closed.

Home Buyer FAQ: What are the Eligibility Requirements for the DPA and MCC Programs?

The best way to get started with our program is to visit this page and take our eligibility quiz. Once you do that, if the result indicates you qualify (we do require a credit score of 620 or higher for our grant), the next step is to contact one of the approved lenders listed on our website.  Only our approved lenders can offer our programs as they are trained as experts in helping homebuyers navigate submitting the required documents and loan application.

We do not take any applications or documents from borrowers directly but rather work behind the scenes training our approved loan officers to work with potential borrowers.  Just call or email one of our approved loan officers and say you found their name on TSAHC’s website and would like to find out more about using our down payment assistance (DPA) grant and/or mortgage credit certificate (MCC) program.  The loan officer will take it from there, help you get started and answer all your questions!

1. Here’s the eligibility quiz: Income limits vary by county. Expanded income and purchase price limits available in targeted areas.https://www.tsahc.org/resource/path-finder-quiz/
2. Here’s our approved lenders by county:https://www.tsahc.org/lenders-realtors/find-a-lender/

Please note:

MCCs are restricted to first-time home buyers but the DPA by itself is not.

Please note that the definition of first-time home buyer is anyone who has not owned (or had ownership interested in) a primary residence in the past three years.  The first-time home buyer requirement is waived for home buyers purchasing a home in a targeted area and qualified veterans.