Quick Answer
Can you stack Texas down payment assistance programs? Yes. Most Texas homebuyers can combine one state program (TDHCA or TSAHC) with one city program (Houston, Austin, Dallas, San Antonio, etc.) plus a Mortgage Credit Certificate (MCC). This "triple stack" can provide $40,000 to $90,000+ in total assistance. The key requirement: You must work with a lender approved for ALL programs you want to use.
Key Takeaways
- The stacking formula: State DPA + City DPA + MCC = Maximum savings
- Typical stacked assistance: $40,000–$90,000 (compared to $15,000–$20,000 with a single program)
- You cannot stack state with state: TDHCA and TSAHC programs don't combine with each other
- Lender selection is critical: Your lender must be approved for every program in your stack—using the wrong lender kills the strategy
- Timeline impact: Stacking adds 2–4 weeks to closing (45–75 days total vs. 30–45 days)
- Not always worth it: For time-sensitive purchases or buyers needing minimal assistance, a single program may be better
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Find My Programs →You just found out you qualify for a $15,000 state grant.
Then you found a city program offering another $30,000.
And a tax credit worth $2,000 a year.
The big question:
Can you use all three?
The short answer: Yes.
But only if you stack them in the right order.
Most Texas homebuyers leave $20,000+ on the table. Why? Because they stop at "Layer 1." They don't realize they can build a capital stack that covers their entire down payment and closing costs.
I'm about to show you exactly how to do it.
The "Layer Cake" Strategy
Most people think DPA is a "pick one" situation.
It's not.
Think of it like a layer cake:
- Layer 1 (The Base): Your State Program (TDHCA or TSAHC). This covers ~5% of your loan.
- Layer 2 (The Filling): Your City Program. This is the big money—often $25,000 to $50,000.
- Layer 3 (The Frosting): The Mortgage Credit Certificate (MCC). This lowers your federal tax bill every single year.
Here is the kicker:
When you stack these correctly, you don't just lower your cash to close. You can often walk away with zero out-of-pocket costs.
The Real Dollar Impact
Let's say you're buying a $350,000 home in Houston.
📊 Without Stacking (Single State Program)
- My First Texas Home DPA: $17,500 (5%)
- Total assistance: $17,500
📊 With Stacking (State + City + MCC)
- My First Texas Home DPA: $17,500 (5%)
- Houston HbAP Recovery Program: Up to $125,000
- MCC Tax Credits: ~$30,000 over 15 years
- Total assistance: $172,500+
That's nearly 10x more assistance from the same eligibility profile.
Here's the thing:
Most buyers don't know this is possible. They pick one program, use whatever lender they find, and miss out on tens of thousands of dollars.
The "Triple Stack" Formula
The most powerful stacking combination in Texas follows this formula:
State Program + City Program + Mortgage Credit Certificate
Layer 1: State Program (Pick ONE)
Choose either TDHCA or TSAHC—not both. They don't stack with each other.
| Program | DPA Amount | Best For |
|---|---|---|
| My First Texas Home (TDHCA) | Up to 5% of loan | First-time buyers under income limits |
| Home Sweet Texas (TSAHC) | Up to 5% of loan | First-time buyers under income limits |
| Homes for Texas Heroes (TSAHC) | 5% + FREE MCC | Teachers, nurses, veterans, first responders |
Pro tip: If you qualify for Homes for Texas Heroes, you get the MCC included at no extra cost (normally $400–$700). This simplifies your stack.
Layer 2: City/Local Program
Your city program provides the largest single chunk of assistance. Amounts vary dramatically by location:
| City | Max Assistance | Type |
|---|---|---|
| Houston | $50,000 (up to $125K for HbAP Recovery) | Forgivable (5 years) |
| Dallas | $60,000 | Deferred loan |
| Austin | $40,000 | Forgivable (5–10 years) |
| San Antonio | $15,000–$25,000 | Forgivable (5 years) |
| Fort Worth | $25,000 | Forgivable |
| El Paso | $25,000–$45,000 | Forgivable |
Layer 3: Mortgage Credit Certificate (MCC)
The MCC isn't a lump sum—it's an ongoing tax benefit. You get a federal tax credit equal to 15–40% of your mortgage interest paid each year, up to $2,000 annually.
Over a 15-year period, that's up to $30,000 in savings.
Important: If you use Homes for Texas Heroes, the MCC comes included. Otherwise, you must select the "Combo" package at application—stand-alone MCC applications are no longer available (fee: $400–$700).
The Compatibility Matrix: What Actually Stacks (And What Doesn't)
Not everything combines. And if you get this wrong, your loan will be denied days before closing.
Here's the compatibility breakdown:
✅ State + City: Usually YES
This is the "Golden Stack." State programs (TDHCA, TSAHC) are designed to work alongside city-level assistance.
Example: My First Texas Home + City of Austin DPA = $57,500 combined
❌ State + State: NO
You cannot combine TDHCA programs with TSAHC programs. Pick one family.
⚠️ Won't Work
My First Texas Home (TDHCA) + Homes for Texas Heroes (TSAHC)
✅ State + MCC: YES (with conditions)
MCC programs are offered through TSAHC. If you're using a TDHCA product (My First Texas Home), you CAN add an MCC—but you must choose the "My First Texas Home Combo" option at the time of application. Stand-alone MCC applications are no longer available.
If you're using TSAHC's Homes for Texas Heroes, the MCC is bundled automatically.
❌ City + City: Rarely
Most city programs don't stack with other city programs. Houston HAP won't combine with Austin DPA, for example.
Exception: Some counties and municipalities have programs that complement city assistance—ask your lender.
Full Compatibility Table
| Combination | Compatible? | Notes |
|---|---|---|
| My First Texas Home + City DPA | ✅ Yes | Most common stack |
| Home Sweet Texas + City DPA | ✅ Yes | Works the same way |
| Homes for Texas Heroes + City DPA | ✅ Yes | Best stack (includes MCC) |
| TDHCA + TSAHC | ❌ No | Cannot combine state programs |
| State Program + MCC | ✅ Yes | Choose "Combo" at application (Heroes includes MCC) |
| City + City | ❌ Rarely | Check specific programs |
Real Stacking Scenarios With Dollar Amounts
Let's walk through four realistic Texas homebuyer scenarios.
Scenario 1: Houston Teacher ($82,000 Income)
Profile: Maria is a high school teacher in Houston ISD. 625 credit score. First-time buyer. Looking at homes around $320,000. She qualifies for the Harvey recovery program (HbAP 2.0) due to prior residency.
Her Stack:
- Homes for Texas Heroes: $16,000 (5% of loan)
- Houston HbAP Recovery Program: Up to $125,000
- MCC (included with Heroes): ~$2,000/year
Total Upfront: Up to $141,000 | Annual Tax Savings: $2,000 | Out-of-Pocket at Closing: ~$0
Scenario 2: Dallas First-Time Buyer ($68,000 Income)
Profile: James works in logistics. 640 credit score. Single, no dependents. Looking at $280,000 homes in Dallas.
His Stack:
- My First Texas Home: $14,000 (5%)
- Dallas Homebuyer Assistance (DHAP): Up to $60,000
Total Available: $74,000 | Actual Needed: ~$45,000 | Out-of-Pocket: $0
Scenario 3: Austin Veteran ($95,000 Income)
Profile: Carlos is an Army veteran now working in tech. 680 credit score. Married with one child. Targeting $400,000 homes in Austin.
His Stack:
- Homes for Texas Heroes: $20,000 (5%)
- Austin Down Payment Assistance: $40,000
- Texas VLB Benefits: Below-market rate + additional savings
Total Upfront: $60,000 | Annual MCC Credit: ~$2,000 | Monthly payment: Lower than comparable rent
Scenario 4: San Antonio Nurse ($74,000 Income)
Profile: Lisa is an ER nurse. 615 credit score. First-time buyer. Budget: $290,000.
Her Stack:
- Homes for Texas Heroes: $14,500 (5%)
- San Antonio Down Payment Assistance: $15,000–$25,000
- MCC (included): ~$2,000/year
Total Upfront: $29,500–$39,500 | Out-of-Pocket: ~$0
Step-by-Step: How to Stack Programs Successfully
Stacking doesn't happen automatically. Here's how to execute it.
Identify Your Eligible Programs
Before talking to lenders, know which programs you likely qualify for. Use the Texas Program Finder to answer 6 questions and see your personalized list of eligible programs, including stacking combinations.
Find a Multi-Program Approved Lender
This is where most stacking attempts fail. Your lender must be approved to offer every program in your stack. Use TDHCA's and TSAHC's lender search tools, and ask specifically: "Are you approved for [State Program] AND [City Program]?"
Complete All Required Education Courses
Most programs require HUD-approved homebuyer education. Options include eHome America, Framework, or Texas Homebuyer U ($0–$99). Complete education BEFORE shopping for homes.
Apply for Programs in the Correct Order
Generally: Start with the state program (during pre-approval), layer city program (after contract), process MCC alongside closing. Your lender will guide sequencing.
Coordinate Timelines and Documentation
Each program has its own paperwork. You'll provide similar documents multiple times. City programs often take longer—build extra buffer into your contract timeline.
Close With All Programs Layered
At closing, all programs fund simultaneously. State DPA applies to down payment/closing costs, city DPA covers remaining gap, MCC activates when you file your first full-year tax return.
The "Lender Trap" (Read This Carefully)
This is where 90% of stacking strategies fail.
You cannot just walk into any bank and ask for a "triple stack."
Why?
Because most loan officers have no idea how to do it.
Processing a standard loan is easy.
But processing a loan with three different government entities? Three sets of guidelines? And three different timelines?
That is a logistical nightmare for an average loan officer.
Here's the rule:
If your lender is not specifically approved for every single program in your stack, the deal will die.
❓ Don't Ask: "Do you do DPA?"
Instead, ask:
- "Are you approved for TDHCA, TSAHC, and the City of Houston HAP program?"
- "How many stacked DPA transactions did you close last year?"
- "What's your typical closing timeline for multi-program purchases?"
🚩 Red Flag
If they hesitate or say "We can figure it out later," run. Find a different lender.
Expect Delays: The Stacking Timeline
Stacking takes time. A single-program purchase closes in 30–45 days.
Stacked purchases? Expect longer:
| Scenario | Typical Timeline |
|---|---|
| State program only | 30–45 days |
| State + MCC | 35–50 days |
| State + City | 45–60 days |
| State + City + MCC | 50–75 days |
What Causes Delays
- City program processing: Municipal housing departments often move slower than state agencies
- Documentation rounds: More programs = more document requests
- Inspection requirements: Some city programs require specific inspections
- Funding availability: City programs may have limited funding cycles
Plan accordingly: Build 60+ days into your contract if stacking state and city assistance.
Common Stacking Mistakes to Avoid
1. Choosing the Wrong Lender
Using a lender approved for only one program means you can't stack. Verify approvals before applying.
2. Applying in the Wrong Order
Starting with a city program before securing state pre-approval can create complications. Let your lender guide sequencing.
3. Missing Education Requirements
Some city programs require specific courses beyond standard HUD education. Complete all requirements before going under contract.
4. Exceeding Combined Assistance Limits
Some programs cap total assistance. If your stack exceeds what you need, you may need to decline a portion or choose differently.
5. Assuming All Programs Stack
They don't. TDHCA and TSAHC programs don't combine. Most city programs don't combine with other cities. Verify compatibility before building your strategy.
6. Ignoring Timeline Realities
Stacking takes longer. If you're in a competitive market or have a firm move date, the extra 2–4 weeks may not be worth it.
When Stacking Isn't Worth It
Stacking is powerful, but it's not always the right choice.
Consider skipping the stack if:
- You're in a bidding war: Sellers prefer simpler, faster closings. A single-program offer may win over a stacked offer.
- You only need minimal assistance: If 5% DPA covers your down payment and closing costs, adding complexity for extra funds you don't need may not be worth the timeline.
- Your market is time-sensitive: Hot markets with multiple offers favor speed. A 45-day close beats a 65-day close.
- Diminishing returns: If you're already getting $50,000 in assistance, adding another program for $5,000 may not justify the extra paperwork and time.
The smart play: Run the numbers. If stacking saves you $30,000+, the extra weeks are worth it. If it saves you $5,000, maybe not. Use the Texas Mortgage Calculator to see how different assistance amounts affect your monthly payment.
Frequently Asked Questions
Can I stack TDHCA and TSAHC programs together?
No. TDHCA (My First Texas Home) and TSAHC (Home Sweet Texas, Homes for Texas Heroes) are separate state agencies. You must choose one or the other—they don't combine.
What's the maximum amount of assistance I can stack in Texas?
It depends on your location and eligibility. The theoretical maximum is around $125,000+ (Houston's Harvey HAP + state DPA + MCC), but most buyers stack $40,000–$70,000 in total assistance.
Does stacking affect my mortgage rate?
It shouldn't. State DPA programs come with competitive market rates. City programs are typically separate subordinate financing that doesn't affect your first mortgage rate.
Can I stack programs if I'm not a first-time buyer?
Some programs allow previous homeowners. TSAHC programs only require that you haven't owned a home in the past three years. Certain city programs have no first-time buyer requirement. Check each program's rules.
Will stacking delay my closing?
Yes, typically by 2–4 weeks. Single-program purchases close in 30–45 days; stacked purchases take 45–75 days. Build this into your offer timeline.
Do I need separate applications for each program?
Yes. Each program has its own application, documentation requirements, and approval process. Your lender coordinates all of them.
Can veterans stack VLB with state DPA programs?
Yes. Texas VLB programs can combine with TDHCA or TSAHC programs, plus city assistance and MCC. Veterans often have the most stacking options.
What happens to stacked assistance if I sell the home early?
Each program has its own recapture rules. State forgivable loans typically require 3–5 years of residency. City programs vary (some require 5–10 years). The MCC has no recapture—you just stop claiming the credit.
Start Your Stack Today
Ready to maximize your Texas down payment assistance? Here's your action plan:
Your Stacking Action Plan
- Step 1: Take the Texas Program Finder Quiz to see which programs you qualify for and get personalized stacking recommendations.
- Step 2: Use the Texas Mortgage Calculator to see how stacked assistance affects your monthly payment.
- Step 3: Read the Complete Texas First-Time Homebuyer Programs Guide for detailed information on every program.
- Step 4: Contact 2–3 multi-program approved lenders and ask the qualifying questions from this guide.
- Step 5: Complete your homebuyer education course before shopping.
The right combination of programs could save you $50,000 or more. The only question is whether you'll leave that money on the table or claim it.
Related Texas Calculators
Helpful Resources
Official Texas DPA Program Links
- TSAHC Eligibility Quiz – See which programs you qualify for in 4 quick questions
- TDHCA Lender Search – Find approved lenders for My First Texas Home
- TSAHC Lender Search – Find approved lenders for Homes for Texas Heroes
- Texas Veterans Land Board – VLB home loan programs for veterans
CalcLogix Guides
- Texas First-Time Homebuyer Programs – Complete guide to all 75+ Texas DPA programs
- Mortgage Rates Today – Check current rates to use in your calculations
- How Amortization Works – See how your mortgage payments break down over time
About Jon Teera
Jon Teera is the Lead Developer and Founder of CalcLogix. He built this stacking guide to help Texas homebuyers maximize their down payment assistance by combining multiple programs strategically—turning $15,000 in assistance into $50,000 or more.
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