Is Texas Down Payment Assistance Forgivable? (2026)
Some of it is, some of it is not. Texas offers repayable deferred assistance, 3-year forgivable second liens, and even true grants. Here is exactly which is which across TDHCA and TSAHC, so you know what you are signing.
The three forms of Texas DPA
The confusion is understandable, because Texas has more than one answer. Across the two statewide operators, down payment assistance shows up as one of three things. A repayable deferred second is a real loan you pay back eventually. A 3-year deferred forgivable second is a loan that erases itself after three years. And a TSAHC grant is money you never repay. All three cover down payment and closing costs, and none of them carries a monthly payment. What differs is whether, and when, you pay it back.
The forgivable option, explained
Both TDHCA and TSAHC offer a 3-year deferred forgivable second lien. It carries no interest and no monthly payment, and it is fully forgiven once you have owned and occupied the home for 36 months. If you sell or refinance before that three-year mark, you repay it, but stay past it and the balance is simply gone. For a buyer planning to put down roots, this is often the most valuable option, real money that disappears if you stay. Compare it with the repayable version on our repayable vs. forgivable page.
The TSAHC grant
TSAHC goes one step further with a grant option on its Home Sweet Texas and Homes for Texas Heroes programs. A grant is not a loan at all, there is nothing to repay, no lien to track, and no three-year clock. The trade-off is usually a slightly different first-mortgage rate compared with the forgivable second, so the best choice depends on your numbers. If a grant matters to you, that points toward TSAHC, see our TDHCA vs. TSAHC page.
Common questions
Is Texas down payment assistance forgivable?
Some of it. Both TDHCA and TSAHC offer a 3-year deferred forgivable second lien (no interest, no payment, forgiven after 36 months if you keep the home). They also offer a repayable deferred second that is due at sale or refinance, and TSAHC offers a true grant that is never repaid.
What happens if I sell before the Texas DPA is forgiven?
If you sell or refinance before the 3-year forgivable second lien reaches its 36-month maturity, you repay the outstanding balance from your proceeds. Stay past 36 months and it is fully forgiven.
Does any Texas program give a grant that is never repaid?
Yes. TSAHC offers a grant option on Home Sweet Texas and Homes for Texas Heroes. A grant is not a loan and is never repaid, unlike TDHCA's assistance, which is a deferred second (repayable or forgivable).
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