Your Guide to First-Time Home Buyer Programs in Highland Village, TX

The median home sale price in Highland Village, TX is sitting around $644,649 right now. Homes are moving in roughly 27 days with only about 2.6 months of supply on hand - so if you're waiting to save up a full 20% down payment, the math isn't working in your favor. That's the reality that pushes most first-time home buyers in Highland Village toward looking for financial help, and the good news is that there's real money available if you know where to look.

Between state-level grants, forgivable loans, and deferred second mortgages, there are multiple ways to cut what you're bringing to the table on closing day for a Denton County property.

Overview of Homebuyer Programs in Highland Village, TX

The bulk of what's available to you here flows through two state agencies: the Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA). Both have funds that apply directly to a Highland Village purchase.

The way these programs work is straightforward. They're built for moderate-income buyers making the jump from renting to owning, and they deliver a percentage of your loan amount to cover upfront costs - taking the pressure off what you need in the bank on closing day.

Who Qualifies as a First-Time Buyer in Texas

Texas uses a three-year lookback. If you haven't owned a primary residence in the past three years, you qualify. Sold a home four years ago? You're generally fine.

Some programs drop that requirement entirely for certain professions - teachers, police officers, and veterans among them. If your career falls into one of those categories, you may be able to access these funds even if you currently own a home, as long as you clear the other income and career guidelines.

Types of State Assistance Available

Three formats: non-repayable grants, forgivable second liens, and deferred second mortgages. They're meaningfully different, so it's worth understanding each before your lender runs your numbers.

Grants don't get repaid - period. Forgivable liens disappear after you've lived in the home for a set number of years. Deferred second mortgages don't accrue interest and require no monthly payments, but when you sell or refinance, the balance is due.

Statewide Grants for First-Time Buyers

Grants are the most popular option for obvious reasons: they don't add to your long-term debt. The funds move through approved mortgage lenders at closing, not through a separate application to the state.

Your primary loan is still a standard 30-year fixed-rate mortgage. The grant sits alongside it, covering your down payment or closing costs without changing the structure of your main financing.

State Grant Programs to Know

TSAHC runs Homes for Texas Heroes and Home Sweet Texas. Both offer down payment and closing cost assistance that you can take as either a non-repayable grant or a three-year forgivable second lien - your choice, depending on what makes more sense for your situation.

TDHCA operates My First Texas Home and My Choice Texas Home. These come as a deferred second mortgage rather than an outright grant, which means the money isn't immediately forgiven but also isn't sitting on your monthly statement.

How Much Grant Money You Can Get

TSAHC programs offer up to 5% of your total loan amount. On a Highland Village purchase, that 5% can make a real dent in the minimum down payment required for an FHA or conventional loan.

TDHCA also goes up to 5% of the loan amount, structured as a 0% interest second mortgage with no monthly payments - deferred until you sell, refinance, or pay off the primary loan.

How to Apply for a Texas Grant

You don't apply directly to TSAHC or TDHCA. The process runs through a participating mortgage lender who handles the paperwork and reserves the state funds for you. Your loan officer reviews your financials, determines which program fits your situation best, and locks in the grant or deferred loan alongside your primary mortgage rate.

Down Payment Assistance Options in Denton County

Here's something worth knowing upfront: some Texas counties and cities have local housing finance corporations that stack additional "gift funds" on top of state programs. Denton County doesn't have that. If you're buying in Highland Village, you're working with statewide options.

That's not a problem - programs like TDHCA's My First Texas Home and TSAHC's Home Sweet Texas apply fully to Denton County and can be used on any qualifying property within Highland Village city limits.

Highland Village and Denton County Programs

TDHCA does have specific local partnerships in places like McKinney, Harris County, and Williamson County, but Denton County isn't on that list. There's no localized stack of assistance specific to Highland Village.

What that means practically: focus on the statewide programs. TDHCA and TSAHC both provide solid coverage for the Dallas-Fort Worth metro area, working off standard county-level income and purchase price limits.

Forgivable Loans vs. Second Mortgages

With a TSAHC three-year forgivable second lien, the debt is completely erased if you stay 36 months. Sell or refinance before that window closes and you'll owe back a prorated amount.

The TDHCA 0% interest second mortgage works differently - it's never forgiven. You'll owe the original principal when you sell or refinance, but you won't pay a cent of interest on it in the meantime.

Income Limits and Qualification Rules

Both agencies cap who can use these funds by income and purchase price. Those numbers aren't fixed forever - they update periodically and vary based on the county where you're buying.

An underwriter will verify your household income and credit history against the current program guidelines. You need to come in under the income ceilings and above the credit floor.

Income and Purchase Price Caps

For 2026, TSAHC's Home Sweet Texas program sets the Denton County income limit at $94,000 for any family size. The purchase price limit is $181,650 for non-targeted areas and $205,870 for targeted areas in Denton County.

TDHCA lists allowable gross household income for its bond down payment assistance programs at around $99,130 for the broader Dallas-Fort Worth area. Ask your lender to confirm the current figure - these limits shift.

Credit Score Rules

TSAHC requires a minimum 620 credit score for government loans like FHA or VA. Switch to an HFA conventional loan and that floor moves to 640. TDHCA's My First Texas Home program generally requires a minimum of 620. Buying a manufactured home with a government loan through TSAHC also requires a 640.

First-Time Buyer Definition and Exceptions

The standard rule: no owned principal residence in the past three years. Buy in a state-designated "targeted area," though, and that requirement is waived entirely.

TSAHC's Homes for Texas Heroes program also waives it for eligible teachers, police officers, firefighters, EMS personnel, and veterans - regardless of where the home is located.

How to Apply for Assistance, Step by Step

The whole process runs through the private mortgage market. You're working with a loan officer, not mailing paperwork to a state agency - but that loan officer has to be registered and approved by the state agency you're using.

There are a few compliance steps beyond a standard mortgage application, including a mandatory education requirement. Getting the sequence right means you don't leave money on the table.

Find an Approved Lender

Start here. Both TSAHC and TDHCA have official lender search tools on their websites. Not every bank or broker is authorized to originate these loans, and working with someone who isn't approved from the start creates delays and bad information. Find a participating loan officer first.

Complete a Homebuyer Education Course

Before you close, you'll need to finish an approved homebuyer education course. It covers budgeting, the mortgage process, and what homeownership actually involves. Most people take it online at their own pace. Your lender will give you a list of accepted providers, and you'll submit the completion certificate to the underwriter.

Combine Programs to Maximize Aid

You can't stack TSAHC and TDHCA funds on the same loan - those are mutually exclusive. But if you're a first-time buyer, you can pair either one with a Mortgage Credit Certificate (MCC), which gives you a dollar-for-dollar federal tax credit based on the mortgage interest you pay each year.

Your loan officer can run the numbers on whether adding an MCC makes sense. It comes with its own application fees and specific income limits, so it's not automatic.

Federal Loan Programs to Consider

State assistance programs are built to pair with standard primary mortgages, and the loan type you choose sets the rules - minimum down payment, mortgage insurance rates, and the credit score you'll need to qualify for the state aid alongside it.

FHA, VA, and USDA Loans

FHA loans are the most common starting point for first-time buyers. They require just 3.5% down and work fully with both TSAHC and TDHCA assistance. VA loans offer zero-down financing for eligible veterans and military members.

USDA loans are also zero-down, but they're tied to rural property eligibility. Highland Village is a built-out suburban city inside the Dallas-Fort Worth metro area, which makes a USDA qualification unlikely - buyers should check the official USDA property eligibility map to confirm.

National Down Payment Assistance Programs

If the Texas state programs' income limits don't work for your household, national down payment assistance options exist through private nonprofits and certain national lenders. These sometimes carry higher income caps or different credit requirements than TSAHC and TDHCA. A mortgage broker can run your profile against both state and national databases to find where you fit.

Frequently Asked Questions

Do I have to be a first-time buyer to qualify for down payment assistance in Highland Village, TX?

Not always. While the standard rule requires you to not have owned a primary home in the past three years, exceptions exist. TSAHC waives this requirement for eligible veterans, teachers, and first responders, or if you purchase in a state-designated targeted area.

Are there specific Denton County housing grants available for Highland Village homebuyers?

No. There is no dedicated local down payment assistance or "gift fund" from Denton County or Highland Village specifically. Buyers in this area utilize the statewide TDHCA and TSAHC programs, which apply to Denton County properties.

Do the state or local homebuyer assistance funds used in Highland Village have to be repaid?

It depends on the program you choose. TSAHC offers a true grant that does not need repayment, as well as a three-year forgivable second lien. TDHCA offers a 0% interest second mortgage that must be repaid when you sell, refinance, or pay off the home.

How do I find an approved lender for first-time buyer programs in Highland Village?

You can use the official lender search tools provided on the TSAHC and TDHCA websites. Both agencies maintain directories of approved loan officers who are authorized to originate these state-backed mortgages.

What happens to my down payment assistance if I sell my Highland Village house before the forgiveness period ends?

If you have a TSAHC three-year forgivable second lien and sell or refinance before the 36 months are up, you must repay a prorated portion of the funds. If you have a TDHCA deferred second mortgage, the full original amount is due upon sale regardless of when you sell.

Can I use local homebuyer programs to purchase a condo or townhome in Highland Village, TX?

Yes. State assistance programs like TSAHC and TDHCA can be used to purchase single-family homes, condos, and townhomes. The property simply needs to serve as your primary residence and fall under the county purchase price limits.