Buying your first home in McKinney can feel exciting and overwhelming at the same time. You want a smart path that fits your budget without surprises at closing. In North Texas, three programs often make a real difference for first-time buyers: TDHCA, TSAHC, and USDA. In this guide, you’ll learn how each one works, what to expect in Collin County, how Grayson County compares, and the steps to get pre-qualified with confidence. Let’s dive in.
Program snapshots
TDHCA: Broad statewide option
The Texas Department of Housing and Community Affairs works through participating lenders to offer 30-year fixed mortgages paired with down payment assistance or Mortgage Credit Certificates in some cycles. Income and purchase price limits are set by county and adjusted by household size. TDHCA appeals to many first-time buyers who meet the county caps and want a straightforward way to reduce upfront costs.
TSAHC: Targeted help plus DPA
The Texas State Affordable Housing Corporation is a statewide nonprofit with homebuyer programs for the general public and targeted groups like teachers, first responders, and veterans. TSAHC offers down payment assistance and may provide MCCs when available. Like TDHCA, income and purchase price limits apply and are county based. TSAHC can be especially competitive if you qualify under an eligible profession.
USDA: Zero down in eligible areas
USDA Rural Development offers guaranteed or direct mortgages that can provide 100% financing for eligible buyers purchasing in designated rural areas. Household income limits depend on county and family size, and the home must sit in a USDA-eligible location. In Collin County, many McKinney addresses are not eligible because USDA targets rural tracts, but some fringe areas and parts of neighboring Grayson County may qualify depending on the specific address.
Income and price limits
How limits work in Collin and Grayson
All three programs cap household income, and TDHCA/TSAHC also cap purchase price or loan amounts. Limits vary by county and household size and are updated periodically. Collin County generally has higher limits than more rural counties, while Grayson County tends to be lower. If your household income is below the applicable county limit for your family size, you may qualify; higher earners in Collin County can hit ceilings quickly.
What this means for McKinney
- In McKinney, many starter and mid-priced homes can fit within TDHCA/TSAHC caps, but higher-priced segments may exceed them.
- USDA does not use a single purchase cap in the same way, but underwriting and appraised value will limit the maximum loan.
- Always confirm current county limits and property caps with the administering agency or a participating lender before you make an offer.
Property eligibility in McKinney
Commonly eligible property types
- Single-family detached homes are generally eligible across TDHCA, TSAHC, and USDA (if the address meets USDA rules).
- Townhomes and condos can qualify, but condo projects must meet investor or insurer standards; older or small complexes can be challenging.
- PUDs are typically fine if they meet program and insurer requirements.
- Manufactured homes are case-by-case and often must be permanently affixed and taxed as real property; some DPA products exclude certain manufactured homes.
- Investment or second homes are typically ineligible; these programs focus on owner-occupants.
USDA address rule, locally
USDA eligibility is address-specific. Much of urban McKinney will not qualify, while some outer tracts or properties in Grayson County may. If you are considering USDA, verify the address early with USDA eligibility tools or by asking a USDA-participating lender to check the property.
How assistance works
Down payment assistance basics
Down payment assistance from TDHCA and TSAHC often comes as:
- A deferred second mortgage that may be forgiven after a set period
- A five- or ten-year forgivable note
- A low-interest subordinate loan
These funds typically cover all or part of your down payment and closing costs. Some assistance pairs only with specific first-mortgage products, so your lender will map out allowed combinations.
Mortgage Credit Certificates (MCCs)
An MCC is a federal tax credit on a percentage of your annual mortgage interest. It reduces federal tax owed, which lowers your after-tax housing cost and can sometimes improve qualifying. MCCs are offered through TDHCA or TSAHC channels during specific cycles and are subject to availability.
What lenders evaluate
Standard underwriting still applies. Expect a review of your debt-to-income ratio, credit score, and reserves if required by the loan type. Seller concessions are usually limited, and repairs may need to be escrowed depending on the program and property condition. In Texas, plan for higher property taxes compared to many other states, even though there is no state income tax. Some closing costs and prepaid items may still be due at closing unless covered by DPA or lender credits.
Pre-qualification steps
- Gather documents
- Photo ID and Social Security numbers
- Two years of W-2s or full tax returns if self-employed
- Two to three months of pay stubs and recent bank statements
- Documentation for other income you plan to use
- A list of debts like student loans, car loans, and credit cards
- Check county and address eligibility
- For TDHCA and TSAHC, confirm the current income limit and purchase price cap for Collin or Grayson County based on your household size.
- For USDA, verify the property address is in an eligible area and that your household income meets the county limit.
- Speak with participating lenders
- Contact several lenders listed by TDHCA or TSAHC and ask for a program eligibility check covering your income, purchase price, and property type.
- Get pre-qualified or pre-approved
- Your lender will pull credit, verify income and debts, and advise which program options fit.
- Ask them to show monthly payments with and without DPA and to illustrate the potential impact of an MCC if available.
- Confirm property eligibility early
- If you are considering condos, manufactured homes, or older properties, ask your lender to confirm program eligibility before you write an offer.
- Plan for timelines
- DPA and MCC paperwork can add days to a few weeks to the process. Ask your lender to estimate timing so you can plan your closing.
Local what-ifs (hypotheticals)
- If you are a two-person household buying a modest townhome in McKinney, you might fit TDHCA or TSAHC income and price limits, with DPA covering part of your down payment and closing costs.
- If your household earns more and targets a higher-priced neighborhood in Collin County, TDHCA/TSAHC caps could be the limiting factor, and a standard first mortgage may be the better route.
- If you are open to nearby areas in Grayson County and find a property in a USDA-eligible tract, a USDA loan could allow you to buy with zero down if you meet income rules.
Always treat these as examples. You will want to verify the latest county limits and program details before you shop or write an offer.
Risks and pitfalls
- Program funding windows can close. Do not go under contract assuming assistance is available without confirming funding.
- Property eligibility issues happen, especially with condos and some manufactured homes. Confirm early.
- County limits change. Numbers in blogs can become outdated quickly.
- In faster-appreciating pockets of Collin County, price caps may lag, which can narrow eligible inventory.
- Texas property taxes can raise the monthly payment more than first-time buyers expect. Budget for taxes and insurance in your affordability plan.
Where to verify details
- TDHCA and TSAHC program pages list county income and purchase limits and participating lenders.
- USDA Rural Development provides address eligibility maps and county income limit tables.
- HUD and FHA pages outline condo and manufactured home guidance that lenders rely on.
- HUD-approved housing counselors and local participating lenders can confirm current program rules, lender overlays, and timelines.
Ready to start?
If you want a clear plan for your first home in McKinney or nearby Grayson County, you do not have to navigate it alone. Our team brings neighborhood-level insight, practical process guidance, and an eye for property fit with these programs. Reach out to discuss your goals, timing, and the best path to pre-qualification so you can shop with confidence. Connect with the team at Texas Life Real Estate LLC.
FAQs
Do first-time buyer programs in McKinney require you to be a true “first-time” buyer?
- Many define first-time as not owning a home in the past three years, but definitions and exceptions vary by program, so confirm the rules for TDHCA, TSAHC, or USDA before you apply.
Can you combine TDHCA or TSAHC assistance with other help in Collin County?
- Often you can combine a first mortgage with certain DPA sources if program rules allow, and seller concessions are limited by loan type; your lender will confirm what stacks.
Are condos in McKinney harder to qualify for with assistance?
- Condos can work, but the project usually needs approval by FHA, VA, USDA, or the mortgage investor; smaller or older complexes are more likely to face eligibility challenges.
Does USDA financing work for McKinney addresses?
- USDA is address-specific, and much of urban McKinney is not eligible; some outer tracts and nearby Grayson County areas may qualify, so verify each address.
Will down payment assistance raise your monthly payment in Collin County?
- Forgivable DPA typically does not add a monthly payment; repayable DPA with interest can add a small amount, depending on terms.
How do Mortgage Credit Certificates help first-time buyers in North Texas?
- An MCC reduces the federal tax you owe by a percentage of your annual mortgage interest, improving after-tax cash flow and sometimes helping with qualifying.
