Texas DPA for Veterans: How to Combine VA Loans with TSAHC

Texas DPA for Veterans: The Ultimate Combination

Texas veterans have access to one of the most powerful home financing combinations available anywhere in the country: a VA loan paired with Texas down payment assistance. Since VA loans require zero down payment, the full 5% DPA from TSAHC programs can be applied entirely to closing costs—potentially allowing veterans to purchase a home with almost no out-of-pocket expense.

According to TSAHC, 9,554 Texas families purchased homes with DPA assistance in 2025, receiving $85.6 million in total down payment assistance. Veterans represent a significant portion of these families, particularly through the Homes for Texas Heroes program.

This guide explains exactly how Texas veterans can combine VA loans with TSAHC assistance to maximize their benefits.

Key Takeaways

• VA loans require $0 down payment—your entire 5% DPA goes toward closing costs
• TSAHC offers grant options—veterans can receive DPA that never needs to be repaid
• Both active duty and veterans qualify—current service members and honorably discharged veterans are eligible
• VA loans have no private mortgage insurance (PMI)—saving hundreds per month compared to FHA
• TDHCA programs exempt veterans from first-time buyer requirements—repeat veteran buyers qualify for all programs

Why VA + Texas DPA Is So Powerful

Most home buyers need down payment assistance to cover their down payment. But VA loans are different—they already require no down payment. This creates a unique advantage for veterans:

Loan Type	Down Payment Required	Where DPA Goes
FHA	3.5%	Down payment first, remainder to closing costs
Conventional	3-5%	Down payment first, remainder to closing costs
VA	0%	100% to closing costs

With an FHA loan on a $300,000 home, your 5% DPA ($14,475) would first cover the 3.5% down payment ($10,500), leaving only $3,975 for closing costs.

With a VA loan, the full $14,475 goes directly to closing costs. Combined with seller concessions (which VA allows up to 4% of the purchase price), many veterans close with virtually nothing out of pocket.

VA Alone vs. VA + Texas DPA: A Comparison

Let us compare a $300,000 home purchase for a Texas veteran:

Component	VA Loan Only	VA Loan + TSAHC DPA
Down Payment	$0	$0
VA Funding Fee (2.15%)	$6,450	$6,450
Closing Costs (~3%)	$9,000	$9,000
DPA Applied	$0	$15,000 (5% of loan)
Net Closing Costs	$15,450	$450
Out-of-Pocket Cash Needed	$15,450	~$450 (earnest money, inspections)

Note: The VA funding fee can be financed into the loan. With DPA, it often is because DPA covers the remaining closing costs.

The difference is dramatic. Without DPA, the veteran needs over $15,000 to close. With TSAHC DPA, the veteran needs only a few hundred dollars for earnest money and home inspections.

Which Texas DPA Programs Work with VA Loans?

All four major Texas DPA programs support VA loan financing:

Program	Agency	Grant Option	First-Time Required	VA Compatible
My First Texas Home	TDHCA	No	Yes (veterans exempt)	Yes
My Choice Texas Home	TDHCA	No	No	Yes
Homes for Texas Heroes	TSAHC	Yes	No	Yes
Home Sweet Texas	TSAHC	Yes	No	Yes

Best Choice for Most Veterans: Homes for Texas Heroes

The Homes for Texas Heroes program is specifically designed for veterans and offers:

• Grant option (no repayment required)
• No first-time buyer requirement
• Works with VA, FHA, USDA, and conventional loans
• Up to 5% of loan amount in assistance

TDHCA Advantage for Veterans

TDHCA programs normally require first-time buyer status for My First Texas Home, but veterans are specifically exempted from this requirement. According to TDHCA guidelines, veterans and active-duty military can use My First Texas Home even if they have owned a home before.

Eligibility Requirements for Veterans

VA Loan Eligibility

To qualify for a VA loan, you must meet one of these service requirements:

Service Type	Minimum Service
Active Duty (wartime)	90 continuous days
Active Duty (peacetime)	181 continuous days
National Guard/Reserve	6 years, or 90 days active duty
Surviving Spouse	Unremarried spouse of veteran who died in service or from service-connected disability

You must also have received an honorable discharge (or be currently serving).

TSAHC DPA Eligibility

In addition to VA eligibility, you must meet TSAHC requirements:

• Credit score: Minimum 620
• Income limits: Vary by county (typically $80,000-$127,000 for 1-2 person households)
• Primary residence: The home must be your primary residence
• Homebuyer education: Complete an approved course (online options available)

How the VA Funding Fee Works with DPA

The VA funding fee is a one-time charge that helps fund the VA loan program. For first-time VA loan users putting $0 down, the fee is 2.15% of the loan amount (as of 2026).

Scenario	Fee Rate
First use, $0 down	2.15%
Subsequent use, $0 down	3.3%
Receiving VA disability compensation	0% (exempted)

On a $300,000 loan, the funding fee would be $6,450. This fee can be:

1. Paid at closing (using DPA funds)
2. Financed into the loan (increasing your loan amount slightly)

Veterans receiving VA disability compensation are exempt from the funding fee entirely, saving thousands of dollars.

Step-by-Step: Combining VA + Texas DPA

Step 1: Obtain Your Certificate of Eligibility (COE)

Your VA COE verifies your eligibility for VA loan benefits. You can obtain it:

• Online through VA eBenefits
• Through your lender (we can request it on your behalf)
• By mail using VA Form 26-1880

Step 2: Check Your DPA Eligibility

Use our qualifier quiz to see which Texas DPA programs you qualify for. We will verify your income, credit, and program eligibility.

Step 3: Complete Homebuyer Education

Both TDHCA and TSAHC require a homebuyer education course. This can be completed online in 4-8 hours through approved providers like eHome America or Framework Homeownership.

Step 4: Get Pre-Approved

Work with a VA-approved lender who also participates in Texas DPA programs, like Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855). We will:

• Verify your VA loan eligibility
• Confirm your TSAHC or TDHCA eligibility
• Issue a pre-approval letter showing your buying power

Step 5: Find Your Home

Shop for homes within the purchase price limits for your county. VA loans have specific property requirements that the home must meet.

Step 6: Close with Maximum Benefits

At closing, your VA loan covers 100% of the home price, your DPA covers closing costs, and you pay minimal out-of-pocket.

VA Loan Benefits Beyond $0 Down

When combined with Texas DPA, VA loans provide exceptional benefits:

Benefit	Impact
No down payment	100% financing
No PMI	Save $100-$300/month vs FHA
Competitive rates	Often lower than conventional
Flexible credit	More forgiving than conventional
No prepayment penalty	Refinance or pay off anytime
Assumable	Next buyer can assume your loan

The lack of private mortgage insurance (PMI) is particularly valuable. On a $300,000 loan, FHA mortgage insurance would cost approximately $175-$250 per month. With a VA loan, this cost is eliminated entirely.

Frequently Asked Questions

Can active-duty military use Texas DPA?

Yes. According to TSAHC and TDHCA guidelines, active-duty service members qualify for all Texas DPA programs. The Homes for Texas Heroes program specifically includes "military members" in its eligible professions list.

Do I need a Texas-specific VA entitlement?

No. VA loan benefits are federal and work anywhere in the country. Your VA entitlement from anywhere in the US can be used to purchase a home in Texas with Texas DPA programs.

What if I have already used my VA loan before?

You may still have remaining entitlement, or your entitlement may be fully restored if you have paid off your previous VA loan. Additionally, TDHCA exempts veterans from the first-time buyer requirement, so you can still use My First Texas Home even if you have owned before.

Can I use Texas DPA if I receive VA disability compensation?

Yes. Veterans receiving VA disability compensation can use Texas DPA programs. Additionally, disabled veterans are exempt from the VA funding fee, saving thousands of dollars.

What closing costs does VA DPA cover?

Texas DPA can cover a wide range of closing costs including:

• Origination fees
• Title insurance
• Escrow setup
• Recording fees
• Survey costs
• VA funding fee (if not financed)
• Prepaid taxes and insurance

Can my spouse's income count if they are not a veteran?

Yes. Non-veteran spouses can be co-borrowers on VA loans. Their income counts toward qualification, and both incomes are considered for DPA income limits. However, if a non-veteran spouse is the only borrower, VA loan benefits do not apply.

Special Considerations for Texas Veterans

Texas Veterans Land Board Programs

The Texas Veterans Land Board (VLB) offers additional programs that may complement TSAHC DPA, including:

• Veterans Housing Assistance Program (VHAP) - Up to $726,200 home loans
• Veterans Land Loan - Financing for land purchases

These programs have different eligibility requirements than TSAHC/TDHCA programs. Your loan officer can help determine the best combination for your situation.

Disabled Veteran Property Tax Exemptions

Texas veterans with service-connected disabilities may qualify for property tax exemptions ranging from partial exemption to 100% exemption for totally disabled veterans. This can save thousands of dollars annually on top of your DPA benefits.

Ready to Get Started?

Texas veterans have access to an exceptional combination of benefits: VA loans with no down payment, TSAHC grants that never need to be repaid, and the elimination of private mortgage insurance. Together, these programs can reduce your out-of-pocket home buying costs to nearly zero.

Check your eligibility today with our free qualifier quiz, or contact us directly to speak with a VA loan and DPA specialist.

• Tanner Cook - NMLS #2090424 - (480) 420-4918
• Zac Cook - NMLS #2111496 - (480) 406-2016

Tanner Cook is a licensed mortgage loan originator (NMLS #2090424) with Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855). This content is for informational purposes only and does not constitute financial advice. Loan approval is subject to credit and property qualification. Equal Housing Lender.