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LOW DOWN PAYMENT

1% down mortgage programs in Texas.

Lender-funded down payment assistance combined with conventional 3% down — for qualifying Texas first-time buyers who need a low cash-to-close.

How it works

1% down is conventional 3% down with a 2% lender contribution.

The most common 1% down structure in 2026 is a Conventional 3% Down first mortgage where the lender contributes a 2% grant or credit to the down payment. You bring 1%, the lender contributes 2%, and the combined 3% satisfies the minimum down payment for a Conventional first-time-buyer loan with PMI.

A second structural pattern uses Conventional 3% Down stacked with state DPA (TSAHC or TDHCA) covering 2% of the 3%. The end result is similar — the buyer brings roughly 1% to closing — but the assistance comes from a state agency rather than the lender directly.

Both structures are real ways for qualifying Texas first-time buyers to close on a primary residence with very little down. They are not magic — the math works because the program absorbs part of the cost, not because lending standards are lower. Credit, income, and DTI requirements are the same as a standard Conventional 3% Down loan.

Requirements

1% down requirements at a glance.

  • 620+ FICO typically (some programs require 660 or 680)
  • First-time home buyer requirement on most 1% down programs
  • Income at or below 80% of area median income (AMI) for many programs
  • Property must be primary residence
  • Single-family, townhouse, or eligible condo (no investment, no manufactured)
  • Standard income and employment documentation (W-2, pay stubs, two years tax returns)
  • Lender contribution typically 2% (which combines with your 1% to satisfy 3% down)
Compare

1% Down vs FHA 3.5% Down at a glance.

1% Down (Conventional) FHA 3.5% Down
Buyer cash for down 1% of purchase price 3.5% of purchase price
Minimum FICO 620–680 (varies by program) 580 (or 500 with 10% down)
Mortgage insurance PMI — removable at 80% LTV MIP — usually for life of loan
First-time-buyer required Typically yes No
Best for 680+ FICO, low cash, stable income 580–680 FICO, credit-rebuilding, gift funds
Frequently asked

1% down questions, answered.

How does a 1% down mortgage actually work?
Most 1% down programs are conventional 3% down loans where the lender contributes 2% of the down payment as a grant or credit, and you bring the remaining 1% from your own funds. The structure satisfies the 3% minimum down payment for the underlying conventional loan while only requiring you to bring 1% to closing. Some programs use a different mechanic — combining a conventional 3% down loan with state DPA to cover 2% of the 3% — but the end result is similar: you bring roughly 1% of the purchase price.
What FICO score do I need for 1% down?
Most 1% down programs require 620 minimum FICO, with some lenders requiring 660 or 680. The underlying loan is a Conventional 3% Down structure with PMI, so the FICO floor matches the conventional first-mortgage requirement. Higher scores produce better PMI pricing on the loan, which is the primary cost difference within the 1% down universe.
Is a 1% down mortgage available in Texas?
Yes. Several national lenders and broker-channel investors offer 1% down conventional programs to qualifying Texas first-time buyers, and TSAHC / TDHCA DPA stacked with Conventional 3% Down can produce a similar effective cash-to-close. Specific program availability shifts as lenders open and close their offerings, so we screen what is currently active when you apply.
1% Down vs FHA 3.5% Down — which is better?
It depends on FICO, income, and your tolerance for PMI vs MIP. 1% down conventional programs use private mortgage insurance (PMI) which is removable at 80% LTV — a meaningful long-term advantage over FHA, where MIP usually stays for the life of the loan. FHA, on the other hand, is more forgiving on credit (down to 580) and DTI (up to ~56%). For a buyer with 680+ FICO and clean income, 1% down conventional often wins long-term cost. For a buyer with 580–660 FICO, FHA at 3.5% is usually the right fit.
Are 1% down mortgages risky?
They are higher-leverage by definition — you start with very little equity, and your loan-to-value ratio is high (97–99%). The risks are real: if home values fall, you could end up underwater quickly. PMI adds to your monthly payment until you reach 80% LTV. The trade-off is access — for buyers who would otherwise wait years to save a 5% down payment, 1% down is the difference between buying now and waiting. We model the actual monthly payment (including PMI) and the LTV trajectory before recommending the structure.

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