Down payment assistance in Hays County, explained without the jargon

Is there a Hays County down payment assistance program?

Not a county run program for buying a home that I could find. Hays County’s own housing help is aimed at repairs for people who already own, not at purchases. So when someone in Hays County gets down payment assistance, it almost always comes from a state program, not the county.

That is actually good news for most buyers. The state programs cover all of Hays County, on a typical Hays County price they can offer more than the old San Marcos program did, and they work the same way whether you are buying in Kyle or Dripping Springs.

What happened to the City of San Marcos down payment program?

San Marcos used to run its own program. It offered up to $12,000 per buyer toward closing costs and part of the down payment, as a forgivable loan, for households earning up to 80 percent of the area median income. If you search for it, you will still find the old brochure.

The city ended it in spring 2024. In its last year it was set up to help eight families and helped two. The city’s own reports say why: buyers who met the income limit had a hard time finding a home they could afford in San Marcos. In late 2025 the city listed bringing a homebuyer program back as something to consider for its 2026 to 2027 funding, but nothing has launched yet. If it does, I will update this post.

Which programs do Hays County buyers actually use?

The Texas State Affordable Housing Corporation, TSAHC, runs the two programs most Hays County buyers look at first: Home Sweet Texas, open to buyers in any profession, and Homes for Texas Heroes, for teachers, nurses, police, firefighters, EMS, veterans, and other eligible professions. Both offer up to 5 percent of the loan amount toward your down payment, closing costs, or both. I originate both through MPA Home Loans, which is a TSAHC participating lender.

You choose how the assistance comes. A grant is never repaid. A deferred forgivable second loan is forgiven after three years as long as you do not sell, refinance, or move out. A deferred repayable second loan is paid back when you sell or refinance. TSAHC serves first-time and repeat buyers, not only first-timers.

There are other state programs too, including TDHCA’s programs and SETH’s 5 Star Texas Advantage, which covers Hays County but not Travis County. That difference matters if you are torn between Kyle and Austin. My Texas grants page compares every program side by side with the current income and price limits.

How does down payment assistance work with an FHA loan?

Most assistance programs pair with a 30 year fixed first mortgage, and FHA is the most common match, which is why it belongs in every FHA conversation. The assistance sits alongside your loan and is applied at closing, toward your down payment, your closing costs, or both, depending on the program.

It also stacks with seller concessions, which matters right now. Sellers in Kyle, Buda, and San Marcos are offering real concessions, including rate buydowns. Seller credits can pay closing costs and buy down your rate, but they cannot be your down payment. Assistance can. Put together, that combination can change how much cash you need to bring by a lot.

What is the catch?

There is always a tradeoff, and I would rather you see it before you decide than after. With TSAHC, choosing the grant usually means a slightly higher rate on your first mortgage than choosing the deferred loan. Over a few years, that difference can be bigger than the grant itself, or smaller, depending on how long you stay.

Income and purchase price limits are hard cutoffs, not a sliding scale. A second loan on the home can make a future refinance more complicated until it is forgiven. And most programs require a homebuyer education course before closing. None of that is a reason to skip assistance, it is just the math I run side by side with you before you pick, never pushed.

What about the grant in a builder’s listing?

You may see new construction listings around Kyle advertising a grant toward your down payment. Those are usually builder or seller incentives, not state down payment assistance, and they are often tied to using the builder’s lender.

They can still be a good deal. Just ask who is paying it, what it is tied to, and what the same house costs with your own lender and a state program instead. My new construction page walks through how I compare those offers.

How long does down payment assistance take?

It adds a few steps: the program’s own approval, the homebuyer education course, and the extra paperwork for a second loan if you choose one. None of it has to slow you down if it is planned from the start.

That is why I bring it up before you write an offer, not after. Send me the price range and the area you are looking in, and I will run your monthly payment with and without assistance, side by side, so you can see what it actually does for you.