The Texas housing-finance ecosystem
Texas's housing pipeline draws on a mix of state agencies, federal pass-through programs, and local frameworks. Programs span the full spectrum: low-income rental, supportive housing for special-needs populations, workforce / missing-middle housing, homelessness prevention, first-time homebuyer assistance, mixed-use redevelopment, and disaster recovery. Below is a directory of every currently-active state-level and major-local program, organized by administering agency.
Texas Department of Housing & Community Affairs (TDHCA)
TDHCA is Texas's primary state housing agency, allocating federal LIHTC, administering federal HOME, NHTF, CDBG-DR, and ESG funds, and operating state-funded programs serving low-income and special-needs populations. TDHCA's QAP allocates 9% LIHTC annually through a competitive scoring process; 4% LIHTC + tax-exempt bonds is administered separately through the Texas Bond Review Board allocation.
Federal 9% LIHTC
Competitive · RentalTDHCA allocates Texas's federal 9% LIHTC ceiling — approximately $102.5 million in 2026 following OBBBA's 12% increase. Awards made through annual competitive QAP scoring with set-asides for nonprofit, rural, at-risk preservation, and supportive housing.
4% LIHTC + Bonds
Non-competitive · BondsNon-competitive 4% LIHTC automatically generated by tax-exempt bond awards. Bond cap is administered by the Texas Bond Review Board (BRB), which is a separate entity from TDHCA — Texas is unusual among states in this split.
Texas Housing Trust Fund
State-funded gap subsidyTexas's state-funded housing trust fund supporting development and preservation of affordable rental housing. Modest scale relative to large-state peers; periodic appropriations rather than dedicated revenue source.
HOME Investment Partnerships
Federal pass-through · Rental & homeownershipTDHCA administers Texas's HOME allocation, providing flexible capital for rental housing, homeownership, tenant-based rental assistance, and existing-housing rehabilitation in non-participating jurisdictions.
National Housing Trust Fund (NHTF)
Federal pass-through · ELI householdsTDHCA allocates Texas's federal NHTF for housing serving extremely-low-income households (≤30% AMI). Used to deepen affordability on TDHCA-funded developments.
CDBG Disaster Recovery
Federal disaster recoveryTDHCA administers Texas's CDBG-DR allocations for housing recovery in declared-disaster areas — extensive activity related to Hurricane Harvey, Hurricane Ida, and recent winter storms. Programs include homeowner rebuilding and rental housing.
CDBG (state-administered)
Federal pass-through · Non-entitlementTDHCA administers federal CDBG for non-entitlement Texas communities. Funds housing rehabilitation, public facilities, and infrastructure in smaller cities and rural counties.
Section 811 Project Rental Assistance
Operating subsidy · Disability housingTDHCA administers Texas's HUD Section 811 PRA allocation, providing project-based rental assistance for extremely-low-income persons with disabilities. Deployed through partnerships with state health and human services agencies.
Multifamily Direct Loan Program
Gap loan · MultifamilyTDHCA's gap-loan program supporting multifamily development, frequently paired with 9% LIHTC awards. Funded through HOME, NHTF, and state appropriations.
Amy Young Barrier Removal Program
Accessibility · Owner-occupiedGrants to assist low-income persons with disabilities in modifying their owner-occupied homes for accessibility. Up to $22,500 per home for ramps, lifts, modifications.
Tax Credit Assistance Program (TCAP)
Federal · Gap subsidyFederal funding administered by TDHCA supporting 4% LIHTC + bond deals that face equity pricing gaps. Active deployment continues for tax credit pipeline support.
TDHCA Section 8 Housing Choice Voucher
Tenant-based rental assistanceTDHCA administers Section 8 HCV in 36 Texas counties not served by a local PHA. Standard HUD voucher program under 24 CFR Part 982.
Emergency Solutions Grant (ESG)
Federal · Homelessness responseTDHCA administers Texas's federal ESG allocation for emergency shelter, rapid rehousing, homelessness prevention, and HMIS services through community-based providers.
HOPWA — TDHCA portion
HIV/AIDS housingTDHCA administers a portion of Texas's HOPWA allocation for non-entitlement areas, providing rental assistance and supportive services for households living with HIV/AIDS.
My First Texas Home
Homeownership · Below-market mortgageTDHCA's first-mortgage product for first-time homebuyers offering below-market rates and down-payment assistance up to 5% of loan amount.
TDHCA Mortgage Credit Certificate
Homeownership · Federal tax creditFederal income-tax credit for eligible first-time buyers equal to a percentage of mortgage interest paid annually.
Texas State Affordable Housing Corporation (TSAHC)
TSAHC is a nonprofit, public-purpose corporation chartered by the Texas Legislature that provides affordable mortgage financing and tax credit allocations distinct from TDHCA's portfolio. TSAHC operates primarily through bond financing and reissuance of returned tax credits, focusing on first-time homebuyer assistance, multifamily preservation, and special partnerships.
TSAHC Homeownership Programs
Homeownership · Down payment & tax creditTSAHC's flagship single-family mortgage programs — Homes for Texas Heroes (for teachers, police, firefighters, veterans, EMS), Home Sweet Texas Home — combining below-market first mortgages with down-payment assistance grants up to 5% of loan amount. Plus Mortgage Credit Certificates.
TSAHC Multifamily Bond Program
Tax-exempt bonds · 4% LIHTCTSAHC issues tax-exempt multifamily bonds with matching 4% LIHTC for affordable rental development. TSAHC's bond allocations supplement TDHCA's PAB allocation from the BRB.
Texas Foundations Fund
Capital subsidy · Rural & supportiveTSAHC's competitive grant program supporting affordable housing for rural Texans, persons with disabilities, and veterans. Funded through TSAHC retained earnings rather than state appropriations.
Local Public Facility Corporations (PFCs) and Housing Finance Corporations (HFCs)
Texas allows cities, counties, and other local entities to charter Public Facility Corporations (PFCs) and Housing Finance Corporations (HFCs) — special-purpose nonprofit entities that issue bonds, take ownership interests in housing developments, and confer 100% property tax exemptions. PFCs in particular have grown dramatically in recent years; legislative reforms in 2023 and 2025 tightened affordability requirements and oversight to prevent abuse, but PFCs remain a major Texas-specific finance mechanism.
Public Facility Corporations (PFCs)
Property tax exemption · MultifamilyPFCs are special-purpose corporations chartered by Texas local governments that can take an ownership interest in multifamily housing developments, conferring 100% property tax exemption for the duration of PFC involvement. 2023 Senate Bill 2350 and subsequent reforms imposed affordability requirements (typically 50% of units restricted at 80% AMI). Used extensively for affordable and mixed-income development across Texas.
Housing Finance Corporations (HFCs)
Tax-exempt bonds · Property tax exemptionHFCs are local government-chartered nonprofit corporations that issue tax-exempt bonds for affordable housing and can provide property tax exemptions on developments where the HFC has an ownership interest. Operate at the city or county level, separate from TDHCA and TSAHC.
Other state-administered and local programs
Beyond TDHCA, TSAHC, and the local PFC/HFC system, Texas has several other state-administered housing-related programs and local frameworks that affect deal economics.
Texas Capital Fund
Economic development · Job creationFederally-funded program administered by Texas Department of Agriculture supporting rural economic development and infrastructure, occasionally including housing-related components in projects combining job creation with workforce housing.
Texas Water Development Board Programs
Infrastructure · Water/sewerTWDB programs financing water and wastewater infrastructure can support affordable housing developments where infrastructure capacity is a development constraint, particularly in rural areas and colonias.
Texas Historic Preservation Tax Credit
State tax credit · Historic rehab25% state tax credit for rehabilitation of certified historic structures. Frequently paired with federal HTC and LIHTC for historic rehabilitation projects producing affordable housing.
City of Austin Affordable Housing
Local bonds · Gap fundingAustin voters approved $300M+ affordable housing bonds in 2022 supporting local gap subsidies for affordable rental and homeownership development. Combined with TDHCA LIHTC and PFC ownership structures.
City of Houston Housing & Community Development
Local subsidy · Federal pass-throughHouston's housing department administers federal HOME, CDBG, and HOPWA funds plus local subsidy programs. Houston's local programs are particularly active in post-Hurricane Harvey rebuilding.
San Antonio Affordable Housing
Local trust fundSan Antonio's affordable housing trust fund supports gap subsidies for affordable rental and homeownership development. Operates through the Department of Neighborhood and Housing Services.
City of Dallas Affordable Housing
Local bonds · Trust fundDallas's affordable housing programs combine federal HOME and CDBG resources with local trust funds and bond authorizations supporting affordable development citywide.
How Texas programs typically combine
Programs combine differently depending on what you're building. A short reference of representative stacks across the program-type spectrum:
- Statewide 9% LIHTC new construction: 9% LIHTC + TDHCA Multifamily Direct Loan + local PFC ownership structure for property tax exemption.
- 4% LIHTC + bonds via PFC ownership: 4% LIHTC + BRB-allocated bonds + local PFC ownership structure. The dominant Texas affordable development pattern.
- Rural workforce housing: TSAHC Texas Foundations Fund + USDA Section 538 + Texas Historic Preservation TC (where applicable).
- Disaster recovery rental: CDBG-DR + 4% LIHTC + bonds. Hurricane Harvey and subsequent disaster recovery has driven significant TDHCA pipeline.
- Supportive housing: TDHCA Section 811 PRA + 9% LIHTC + state housing trust fund + HHSC service contracts.
- First-time homebuyer: TSAHC Homes for Texas Heroes or Home Sweet Texas Home + DPA grant + MCC.
Post-OBBBA implications
- Permanent 12% LIHTC increase: Texas's annual 9% LIHTC ceiling is permanently larger starting 2026.
- 25% PAB financed-by test: for bonds issued after December 31, 2025, materially expanding the pipeline of 4% LIHTC deals that can be supported per dollar of bond volume cap.
- Permanent OZ designations: Qualified Opportunity Zone designations gain permanence; Rural OZ provisions may apply in qualifying portions of the state.
- Section 45L / 179D termination (June 30, 2026): Developers pursuing energy-efficient construction should accelerate placed-in-service dates.
This is educational reference material for affordable-housing practitioners, not legal, tax, financial, or investment advice. State program details, funding levels, and rules change frequently — consult the relevant state agencies and qualified counsel before structuring any transaction. See Disclaimer.