First-Time Home Buyer Guide — Dallas
Down payment assistance, the Texas option period, what to inspect, and everything else first-time buyers need to know before they make an offer.
What do first-time buyers need to know in Dallas?
Buying your first home in Dallas is more achievable than most people think — especially with Texas-specific down payment assistance programs that can cover your entire down payment. The biggest challenges are understanding the Texas contract, knowing which inspections to order, and not letting the process rush you into decisions. Ged Dipprey has guided first-time buyers through Dallas for 18+ years.
First-Time Buyer Quick Facts — Dallas
- Minimum Down Payment: 3.5% (FHA) — 0% for VA loans
- Down Payment Assistance: Up to 5% via TSAHC / TDHCA
- City of Dallas HAP Grant: Up to $60,000 for eligible buyers
- Recommended Credit Score: 620+ (740+ for best rates)
- Texas Option Period: 7–10 days (right to terminate)
- Homestead Exemption Savings: $800–$1,200/year after closing
- Dallas Median Home Price (2026): $415,000
Down Payment Assistance Programs in Texas
Most first-time buyers don't realize how many assistance programs are available in Texas. You do not have to come up with 20% — or even 5% — out of pocket if you qualify.
TSAHC — Texas State Affordable Housing
TSAHC offers down payment assistance of 3–5% of the loan amount as a grant (no repayment required) for buyers who meet income limits. Eligible for FHA, VA, USDA, and conventional loans. Ged works with lenders who are approved TSAHC providers.
TDHCA — My First Texas Home
The Texas Department of Housing offers 30-year fixed mortgages with down payment assistance up to 5% of the loan. Income limits apply. Buyers must complete a homebuyer education course.
Dallas Homebuyer Assistance Program (HAP)
The City of Dallas provides up to $60,000 in forgivable loan assistance for low-to-moderate income buyers purchasing within Dallas city limits. Property must be the buyer's primary residence.
Texas Veterans Land Board
Texas veterans may qualify for below-market interest rates through the VLB Veterans Housing Assistance Program, independent of federal VA loan benefits. Both programs can sometimes be combined.
Four Things First-Time Buyers Often Get Wrong
- 1
Understand Your Option Period
Texas gives buyers an "option period" — typically 7–10 days — to inspect the home and back out for any reason. You pay a small option fee ($200–$500 is common) to the seller; Ged negotiates this as part of your offer.
- 2
Earnest Money vs. Option Fee
Earnest money (1–2% of purchase price) is held in escrow and applied to your closing costs. The option fee is paid directly to the seller and is non-refundable but is typically credited back at closing. If you terminate during the option period, you keep your earnest money but lose the option fee.
- 3
The Home Inspection
A general inspection ($400–$600) covers the major systems: foundation, roof, HVAC, plumbing, electrical. First-time buyers are often surprised by the length of inspection reports — most findings are normal wear-and-tear, not deal-killers. Ged helps you read the report and decide what to negotiate.
- 4
File Your Texas Homestead Exemption
After closing, file a homestead exemption with your county appraisal district. This reduces your assessed value by $100,000 for school district taxes and caps annual increases at 10%. It saves most Dallas homeowners $800–$1,200 per year.
First-Time Buyer — Frequently Asked Questions
How much do I need to put down as a first-time buyer in Dallas?
The minimum is 3.5% with an FHA loan or 0% with a VA loan (if eligible). Most first-time buyers in Dallas put down 6–7%. A 20% down payment eliminates Private Mortgage Insurance but is not required. Down payment assistance programs like TSAHC can cover 3–5% of the loan amount for qualifying buyers.
What credit score do I need to buy a home in Dallas?
Most conventional lenders require a minimum score of 620. FHA loans accept scores as low as 580 with 3.5% down. The better your score, the lower your interest rate — borrowers above 740 typically get the best available rates.
What is the Texas option period and do I need one?
Yes. The Texas option period (typically 7–10 days) gives you the right to terminate the contract for any reason and get your earnest money back. You pay a small option fee to the seller to activate it. Ged recommends always including an option period — skipping it to make your offer more competitive is rarely worth the risk.
How long does it take to close on a home in Dallas?
From accepted offer to closing, the typical timeline is 30–45 days for financed purchases. Cash offers can close in 10–14 days. FHA loans sometimes take 45–60 days. Your lender will give you a target closing date once the loan file is complete.
Ready to Buy Your First Dallas Home?
Ged Dipprey has helped hundreds of first-time buyers navigate the Dallasmarket. Let's talk about your budget, your neighborhood, and what's possible right now.