Buying your first home in Collin County might be closer than you think. If saving for a down payment or closing costs feels like the biggest hurdle, you are not alone. The good news is that a mix of state, federal, and local programs can help you bring less cash to closing and set you up for long-term success. In this guide, you will learn which programs are common in McKinney and the Dallas-Plano-Irving area, how eligibility typically works, and the steps to move from preapproval to keys. Let’s dive in.
What first-time buyer programs can do
Down-payment assistance and first-time buyer programs are designed to make homeownership more attainable. Here is how they typically help:
- Reduce the cash you need at closing through grants or second-lien assistance.
- Pair a low down payment loan with support for closing costs.
- Improve your after-tax cash flow with a Mortgage Credit Certificate (MCC), which can reduce your federal income tax liability.
- Offer structured guidance through required homebuyer education.
Program options in Collin County
TDHCA statewide programs
The Texas Department of Housing and Community Affairs (TDHCA) sponsors Texas-wide mortgages and down-payment assistance that Collin County buyers frequently use. TDHCA programs often combine a first mortgage with a deferred or forgivable second-lien DPA and may include an MCC. You can review state program details, lender participation, and MCC information on the TDHCA website.
What this can mean for you:
- A lower upfront cash requirement, sometimes paired with a competitive interest rate.
- Options for FHA, VA, USDA, or conventional first mortgages depending on your situation.
- Access through approved lenders throughout the Dallas-Plano market.
Federal loan programs you can pair
- FHA: Popular for low down payments and flexible credit history. You can often pair FHA with DPA for closing cost help. For FHA basics and counseling resources, start with HUD’s official site.
- VA: Zero-down financing for eligible veterans and active service members. Some assistance can still help cover closing costs. Learn more at the U.S. Department of Veterans Affairs.
- USDA: Zero-down financing in eligible areas. Many inner-suburban parts of Collin County do not qualify, but some outskirts may. Check address eligibility using USDA Rural Development resources.
Conventional low-down options
Conventional programs like Fannie Mae’s HomeReady and Freddie Mac’s Home Possible allow down payments as low as 3 percent, subject to income and area rules. These can sometimes be combined with DPA.
- Explore program guidance at Fannie Mae.
- Review comparable options at Freddie Mac.
Local city resources
City and county housing offices sometimes offer education, referrals, or limited grant programs that open or close based on funding. In McKinney, start with Housing & Neighborhood Services on the city website to see if any current local offerings or workshops are available.
Who qualifies and how it works
Eligibility varies by program, county, and year. Still, you will see these common themes in McKinney and across Collin County.
First-time buyer definition
Most programs define a first-time buyer as someone who has not owned a home in the past three years. Some programs waive the rule for eligible veterans or certain targeted areas.
Income and price limits
Expect household income caps tied to area median income, plus maximum purchase price limits. These limits change over time and can vary with household size and location inside Collin County.
Property and occupancy rules
Most assistance is for a primary residence that you will live in, not an investment property. Eligible property types often include single-family homes, townhomes, and some condos that meet approval guidelines.
Credit and homebuyer education
Minimum credit scores differ by loan type. FHA tends to be more flexible than conventional, while each lender may set additional requirements. Many assistance programs require you to complete an approved homebuyer education course before closing. To find education and counseling resources, use HUD’s counseling information.
How DPA second liens are structured
Down-payment assistance can take several forms:
- Forgivable grants that phase out over a set time if you remain in the home.
- Deferred, interest-free second liens with no payments until you sell, transfer, or refinance.
- Repayable second mortgages with interest and scheduled payments.
Make sure you understand any repayment or resale rules before you sign.
MCC tax credit basics
An MCC is a federal tax credit that reduces your annual federal income tax liability by a percentage of the mortgage interest you pay, within program limits. It does not change your mortgage payment, but it can improve your monthly budget by reducing taxes. If you plan to use an MCC, it typically must be issued before closing. TDHCA provides details on MCC availability on the TDHCA website.
Timeline in McKinney and Collin County
These are typical ranges. Your lender, chosen program, and documentation can speed things up or slow them down.
- Pre-purchase (2 to 6 weeks): Prequalification with a lender, eligibility checks, and completion of any required homebuyer education.
- Program reservation (1 to 4 weeks): Your lender or a housing office reserves DPA funds and submits documentation.
- Underwriting and appraisal (2 to 4 weeks): Standard loan processing and any program-specific reviews.
- Final approval to closing (1 to 3 weeks): Clear conditions, issue any MCC before closing, and schedule the closing.
From contract to close, most buyers using assistance should plan for 30 to 60 days. If you are relocating to the Dallas-Plano-Irving area, start early to allow time for counseling and document collection.
Smart steps to get started
Use this checklist to prepare and keep your path to closing smooth.
- Gather documents: photo ID, Social Security numbers, recent pay stubs, last 2 years of W-2s or tax returns, bank statements, and any gift documentation.
- Get prequalified with a lender experienced in TDHCA and DPA. Confirm they participate with TDHCA and can reserve funds and process MCCs if desired. Begin with the TDHCA program overview and lender info.
- Complete homebuyer education early if your chosen program requires it. You can locate counseling resources and education information through HUD’s site.
- Ask which loan type fits your goals: FHA, VA, USDA, or conventional low down payment options, and whether DPA can pair with your choice.
- If you want zero down, check whether your target homes are in a USDA-eligible area. For veterans and active duty, confirm eligibility at the VA website.
- Review DPA terms: Is it forgivable, deferred, or repayable? How long must you live in the home?
- Monitor local resources: Look for updates from the City of McKinney in case limited local funds or workshops open.
Tradeoffs and tips to keep in mind
- Funding can be limited or seasonal. Reserve early once you are under contract.
- Combining programs adds complexity. Coordinate timing so your MCC and DPA are approved before closing.
- Forgivable assistance often requires you to live in the home for a set period. Selling or refinancing earlier may trigger repayment.
- An MCC reduces federal tax liability. It does not increase your lender credit or reduce your mortgage payment, but it can improve your net monthly budget. Consider speaking with a tax professional for guidance on your personal situation.
- If you are relocating for work, begin prequalification and education before you arrive to tour homes.
Simple Collin County buyer scenarios
These examples show how buyers in McKinney and nearby suburbs often structure financing. Your path may look different based on income, credit, and property.
- FHA plus DPA: You choose an FHA loan for its flexible credit requirements and pair it with TDHCA down-payment assistance to reduce cash to close.
- VA with closing cost help: As an eligible veteran using a VA loan, you do not need a down payment. You explore local assistance to offset closing costs and complete any required education.
- Conventional 3 percent down with MCC: You qualify for a conventional low-down-payment option and add an MCC through TDHCA to improve your after-tax cash flow.
- USDA zero down in an eligible pocket: You target a newly developing area on the edge of Collin County and confirm address eligibility using USDA resources.
How local expertise helps in McKinney
Programs change, funding windows open and close, and each property can trigger different rules. A local team that understands Collin County neighborhoods, common lending packages, and the offer-to-close timeline can save you time and stress. You get a clearer path to the right loan type, a realistic schedule, and a stronger offer strategy in a competitive Dallas-Plano-Irving market.
Ready to map your options and start touring homes? Connect with the local team at Integrity Plus Realty for step-by-step guidance through Collin County’s first-time buyer landscape.
FAQs
What counts as a first-time buyer in Collin County programs?
- Most programs define it as not owning a home in the past three years, with possible exceptions for veterans or targeted areas.
How do income limits work for McKinney buyers using DPA?
- Income caps are tied to area median income and vary by household size, county, and program; verify current limits with your lender or the program issuer.
Can I combine FHA with Texas down-payment assistance?
- Yes, many DPA options are designed to pair with FHA, and your lender can confirm which TDHCA packages are open when you apply.
Does a Mortgage Credit Certificate lower my mortgage payment?
- No, an MCC is a federal tax credit that reduces your annual federal tax liability, which can improve your monthly budget but does not change your mortgage payment.
Are USDA loans available in suburban Collin County neighborhoods?
- Many inner-suburban areas do not qualify, but some outskirts may; confirm by checking address eligibility through USDA resources.
How long does a first-time buyer loan with assistance take to close?
- Plan on 30 to 60 days from contract to close, with timing affected by program reservations, underwriting, and required education.
