Layering Assistance: Combine TSAHC With Dallas DHAP

Saving for a down payment in Dallas can feel like a moving target. If you’ve heard about TSAHC and the City of Dallas DHAP, you might wonder if you can use both to boost your buying power. You can, in some cases, but the details matter. In this guide, you’ll learn how these programs work, when you can combine them, and the steps to do it without delays. Let’s dive in.

DHAP at a glance

The Dallas Homebuyer Assistance Program (DHAP) is run by the City of Dallas and provides help with down payment, closing costs, or principal reduction for homes inside Dallas city limits. Assistance is a deferred, forgivable second lien with no monthly payment, forgiven over a set affordability period. Typical maximums are up to $60,000 in designated High Opportunity Areas and up to $50,000 elsewhere, with income and sales price limits. You must use a DHAP‑approved lender and an approved title company, and you apply through the City’s Neighborly portal. See program details on the City’s DHAP page and program manual for underwriting and subordination rules.

• City overview and application process: Dallas DHAP page
• Underwriting, affordability, and subordination: DHAP Program Manual
• Approved lenders and title companies: DHAP Approved Lenders and Approved Title Companies

Note: The City posts an annual application window that can change. Always verify current dates and funding on the DHAP page.

TSAHC at a glance

The Texas State Affordable Housing Corporation (TSAHC) offers statewide homebuyer help through approved lenders. TSAHC provides 30‑year fixed mortgages plus Down Payment Assistance (DPA) as a grant or a forgivable second lien. DPA is commonly up to about 3 to 5 percent of the loan amount. TSAHC also offers Mortgage Credit Certificates (MCCs), which provide a federal income tax credit. You apply for TSAHC programs through a TSAHC‑participating lender. Learn more about TSAHC’s assistance types and MCCs:

• Program types and DPA options: What TSAHC offers
• MCC basics and timing: What is an MCC?

Can you combine them?

Sometimes. TSAHC allows additional subsidy programs if they meet mortgage investor rules and are not attached to the first‑lien mortgage in ways TSAHC prohibits. In practice, stacking with DHAP depends on lien structure and a City “subsidy‑layering” review under HOME rules. See TSAHC’s guidance on using additional subsidies and the City’s underwriting manual:

• TSAHC stacking guidance: Using additional subsidy programs
• DHAP HOME underwriting and subordination: DHAP Program Manual

Workable combinations often include:

• TSAHC DPA as a grant (no lien) plus DHAP as the second lien.
• DHAP assistance plus a TSAHC MCC, since an MCC is a tax credit, not a lien.
• A split where one source covers down payment and the other covers closing costs, if investor and program rules allow.

Your lender must confirm investor guidelines. The City will review the full assistance package to avoid over‑subsidy.

How to layer assistance step by step

1. Get aligned early

• Choose a lender who is DHAP‑approved and also works with TSAHC. Do not assume every lender can do both. Start with the City’s DHAP Approved Lenders.

2. Check eligibility in parallel

• DHAP: Confirm income eligibility, property inside Dallas, current sales price limits, and homebuyer education. Apply via the City’s portal on the DHAP page.
• TSAHC: Confirm program fit (Homes for Texas Heroes or Home Sweet Texas), income/credit, and whether your DPA would be a grant or a forgivable second lien. If using an MCC, apply before closing.

3. Map the lien structure

• Ask your lender to produce a simple diagram of the first mortgage, DHAP lien, and any TSAHC lien. If both would be recorded second liens, lender, TSAHC, and the City must approve the plan.

4. Complete subsidy‑layering review

• The City will underwrite the entire assistance stack under HOME rules. Your lender will confirm FHA/VA/USDA or conventional guidelines. Expect document requests before final approval.

5. Time your approvals

• Apply to both programs early. DHAP issues conditional eligibility and requires closing within specific windows. TSAHC program steps occur through your lender.

6. Prepare for closing

• Close at a DHAP‑approved title company. Ensure your Closing Disclosure reflects lien positions, forgiveness terms, and any TSAHC fees or forms.

7. After closing

• Understand your affordability period and forgiveness schedule. DHAP subordination for refinancing is limited and not allowed for cash‑out. Keep your documents handy for future mortgage planning.

Rules, limits, and timing to know

• Income and price caps apply. The City lists current limits on the DHAP page.
• Sales price note: The City’s web page and program manual have shown different numbers in the past. Verify the current cap with DHAP staff before making an offer.
• Lien priority matters. DHAP is a recorded second lien. TSAHC DPA may be a grant or a recorded lien. Two recorded subordinate liens can be difficult to approve.
• MCC timing. MCCs must be set up before closing and may have first‑time buyer rules depending on the product.
• Approved partners only. DHAP requires approved lenders and title companies for closing.

Common pitfalls to avoid

• Assuming both programs always stack. If TSAHC issues DPA as a recorded lien, pairing it with DHAP can be complex without special approvals.
• Waiting to apply. DHAP funds are limited and first‑come, first‑served, and application windows can change.
• Overlooking subsidy‑layering. The City may adjust DHAP amounts to prevent over‑subsidy under HOME rules.
• Missing MCC deadlines. MCCs must be in place before closing to count.
• Ignoring refinance rules. DHAP subordination is limited and generally not permitted for cash‑out. Plan ahead.

Who this strategy helps

• First‑time and repeat buyers who qualify for DHAP and want to boost upfront funds with TSAHC.
• Buyers using TSAHC DPA as a grant plus DHAP as a second lien.
• Buyers who pair DHAP assistance with a TSAHC MCC for long‑term tax savings.

Ready to compare your options?

If you want a clear, step‑by‑step plan for your situation, we’re here to help you coordinate with the right lender, confirm eligibility, and keep the process on track in Dallas. Reach out to The Cole Home Team to get started.

FAQs

Can Dallas buyers layer TSAHC and DHAP?

• Yes, sometimes. It depends on lien structure, investor rules, and the City’s HOME subsidy‑layering review; your lender and the City must approve the full assistance stack. See TSAHC’s additional subsidy guidance.

How do MCCs work with DHAP in Dallas?

• An MCC is a federal tax credit and not a lien, so it often pairs well with DHAP; you must apply before closing and confirm any first‑time buyer rules. See TSAHC’s MCC overview.

What DHAP assistance amounts are typical?

• The City lists up to $60,000 in High Opportunity Areas and up to $50,000 elsewhere, with prorated forgiveness over an affordability period. Check the DHAP page and program manual for current limits.

Who approves my lender and title company for DHAP?

• The City of Dallas requires DHAP‑approved lenders and approved title companies; verify your partners on the City’s approved lists.

What if TSAHC gives me a recorded second‑lien DPA?

• Two recorded subordinate liens can cause conflicts. Your lender must confirm investor rules, and TSAHC and the City must agree to the lien order; using a TSAHC grant or an MCC often simplifies stacking. See TSAHC’s stacking guidance.

Are DHAP sales price limits the same everywhere in Dallas?

• Limits are program‑specific and can change. The City has posted different numbers across sources; confirm the current cap with DHAP staff and the latest materials on the DHAP page.