First‑Time Buyer Programs For McKinney Homes

Buying your first home in McKinney can feel out of reach when you hear about big down payments and strict rules. The truth is, there are several first-time buyer programs that can lower your upfront costs and simplify financing. If you understand your options and how lenders evaluate applications, you can choose a path that fits your budget and timeline. This guide walks you through the major programs used in McKinney and Collin County, how to qualify, and the steps to lock in the right loan with a trusted local lender. Let’s dive in.

First-time programs used in McKinney

Federal loan options

• FHA loans. FHA allows as little as 3.5% down for many borrowers with a 580 or higher credit score. You’ll pay an upfront and monthly mortgage insurance premium, but FHA is flexible with credit and debt-to-income. FHA is a common starting point for first-time buyers.
• VA loans. If you are an eligible veteran, active-duty service member, or certain surviving spouses, VA financing can offer zero down and no monthly mortgage insurance. A one-time funding fee typically applies and can be financed. Learn more on the VA’s official page for VA home loan benefits.
• USDA loans. USDA loans can offer zero down for qualifying buyers purchasing in USDA-eligible areas and within income limits. Parts of Collin County may still qualify, though eligibility inside McKinney is limited by suburban development. Check properties using the USDA property eligibility map.
• Conventional low-down options. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible often allow 3% down for eligible buyers, with private mortgage insurance instead of FHA’s MIP. These programs usually require stronger credit and have income rules. Explore HomeReady program details and Home Possible guidelines.

Texas statewide and local assistance

• TDHCA assistance. The Texas Department of Housing and Community Affairs pairs 30-year fixed mortgages with down payment or closing cost help. Programs often include income and purchase price limits and require homebuyer education. See current options on the TDHCA homeownership page.
• TSAHC options. The Texas State Affordable Housing Corporation offers down payment assistance and mortgage credit certificates for eligible buyers, including income-qualified households and targeted professions like teachers, first responders, and nurses. Many options are forgivable or deferred. Review offerings at TSAHC’s homebuyer resources.
• City or county programs. Municipal or county programs may provide grants or deferred loans that are forgivable after an occupancy period. Funding and rules change often, so verify with the City of McKinney or Collin County housing offices, or an approved participating lender.
• Lender-based programs. Some lenders offer proprietary low-down or flexible underwriting options, and many package state assistance with FHA or conventional loans. Not every lender participates in every program, so matching with the right lender matters.

Who qualifies and what lenders check

Eligibility basics

• First-time status. Many programs define a first-time buyer as someone who has not owned a home in the last three years. Some programs vary, so confirm the definition for your chosen option.
• Credit score. FHA allows 3.5% down beginning at 580 for many lenders. Conventional low-down programs often require around 620 or higher. VA has no universal minimum FICO, but many lenders use 620 as a guideline.
• Income and price limits. State and local assistance usually includes household income and purchase price caps that vary by county and sometimes household size. These caps may affect which neighborhoods and price points are eligible.
• Debt-to-income ratio. Typical maximums fall from the low to upper 40 percent range. FHA can be more flexible with compensating factors. Conventional loans often tighten DTI for 3% down options.
• Employment and reserves. Most lenders want two years of steady employment or an acceptable history. Some programs require limited cash reserves, while others do not.
• Property and occupancy. Most first-time buyer programs require a primary residence. Single-family homes are common, condos must be approved, and some programs limit manufactured housing.

Down payment assistance terms

• Format. Assistance can be grants, deferred forgivable loans, or low-interest second liens.
• Typical amounts. Many programs offer roughly 3% to 5% of the purchase price, though amounts vary by program and funding.
• Forgiveness. Deferred loans may be forgiven after a set owner-occupancy period, often between 3 and 10 years.
• Compatibility. Not every DPA pairs with every loan type. Confirm if your assistance works with FHA, conventional, VA, or USDA.

Mortgage insurance and fees

• FHA. Expect an upfront mortgage insurance premium that can be financed and monthly MIP. The length of MIP depends on your down payment and loan term.
• Conventional. You’ll pay private mortgage insurance until you reach 20% equity. PMI can be canceled later, which can lower your long-term cost.
• VA. No monthly mortgage insurance. A one-time funding fee usually applies, with exemptions for some borrowers who have a service-connected disability.

How to compare your options in McKinney

Use this checklist to compare quotes side by side across lenders and programs:

1. Down payment required as a percent and dollar figure
2. DPA availability and type, including grant or forgivable second lien and the amount
3. Interest rate and APR, since APR includes lender fees
4. Monthly mortgage insurance and the dollar amount
5. Upfront fees like FHA MIP or the VA funding fee, and whether they can be financed
6. Minimum credit score and any lender overlays
7. Maximum DTI and any reserve requirements
8. Property rules, including condo approvals and manufactured home eligibility
9. Income and purchase price limits if using DPA or state programs
10. Closing costs and any limits on seller credits
11. Required homebuyer education or counseling
12. Underwriting timelines and rate lock periods
13. Whether a specific lender is required to access a program

Example scenarios

• Scenario A: FHA plus grant DPA. Helpful if your credit is on the lower side and you want to minimize cash to close. Expect monthly MIP and compare the total payment to other options.
• Scenario B: Conventional 3% down plus DPA. Potentially lower monthly MI and the option to cancel PMI later. You’ll likely need stronger credit and must meet any program income limits.
• Scenario C: VA zero down. For eligible veterans and service members, this often delivers the lowest all-in monthly cost due to no monthly MI. Review the funding fee and your exemption status.
• Scenario D: USDA zero down. Strong option if your target property is in a USDA-eligible area and you meet income rules. Confirm address eligibility early to avoid surprises.

Local tips for McKinney buyers

• Property eligibility. McKinney is primarily suburban, with many single-family options. If you are considering a condo, ask your lender about the required approval lists for your chosen loan program.
• USDA boundaries. USDA eligibility may be limited within McKinney’s city limits, but some nearby areas in Collin County may qualify. Use the USDA eligibility tool to check addresses before you tour.
• Program funding changes. City, county, and state assistance can change annually or mid-year. Confirm current funding status and price caps with TDHCA, TSAHC, or a participating lender before you write offers.
• Pricing and caps. Some programs set purchase price limits. Your agent and lender should align your home search with those caps so you avoid ineligible properties.

Your step-by-step next moves

1. Gather your basics. Collect your last 30 days of pay stubs, 2 years of W-2s or tax returns, 2–3 months of bank statements, a government ID, and your Social Security number.
2. Get prequalified with 2–3 local lenders. Ask specifically which programs they participate in, including TDHCA, TSAHC, VA, USDA, and any city or county DPA.
3. Compare using the checklist. Review down payment, DPA terms, interest rate and APR, monthly MI, and total funds to close. Request side-by-side Loan Estimates.
4. Complete homebuyer education if required. Most programs accept online courses through HUD-approved providers. Find options on the HUD counseling page.
5. Secure a full pre-approval. Submit documents for a full underwrite and ask for a letter that lists your loan type, maximum amount, and any conditions.
6. Align your home search. Target properties that meet price caps, property type rules, and eligibility maps if using USDA or condo financing.
7. Lock and submit. Once under contract, lock your rate and make sure any DPA paperwork and lender participation requirements are filed on time.

Questions to ask every lender

• Which loan products do I qualify for right now, including FHA, VA, USDA, and conventional 3% down options like HomeReady and Home Possible?
• Which DPA programs do you participate in for Collin County and McKinney, and are they currently funded?
• What exact assistance amounts are available to me, and are they grants, forgivable, or repayable second liens?
• What minimum credit score and DTI do you require for each option, and do you have any overlays?
• What is my estimated monthly payment with taxes, insurance, and any MI? Please provide side-by-side Loan Estimates.
• What are your typical underwriting and closing timelines, and do you handle underwriting in-house?
• Do you participate in TDHCA and TSAHC? Can you confirm in writing?

Pre-approval document checklist

• Government ID
• Social Security number
• Last 30 days of pay stubs
• Last 2 years of W-2s or 1099s
• Last 2 years of federal tax returns if self-employed
• Last 2–3 months of bank statements for all accounts
• Asset statements for reserves if needed
• Divorce decree or child support documentation if used as income
• DD-214 or VA statement of service if applying for VA

Typical first-time buyer timeline

• Initial shopping and prequalification: 1–7 days
• Full pre-approval after documents: 3–10 business days
• Home search to accepted offer: varies by market
• Underwriting to closing after contract: typically 30–45 days
• Note on assistance: DPA programs can add coordination steps, so build in a little extra time.

Ready to start?

If you want a clear plan, the right lender match, and a smooth path to closing, you are not alone. With the right program and a detailed checklist, you can purchase confidently in McKinney and greater Collin County. For a step-by-step plan and introductions to lenders who actively work with TDHCA, TSAHC, VA, and USDA, connect with Joseph Bazan. We will help you compare options, align your home search with eligibility rules, and move from pre-approval to keys with less stress.

FAQs

What first-time buyer programs are available in McKinney, Texas?

• You can access FHA, VA, USDA, and low-down conventional loans plus statewide assistance through TDHCA and TSAHC, with availability subject to income, price caps, and lender participation.

How much down payment do I need to buy in Collin County?

• FHA can be as low as 3.5% down, conventional options may allow 3% down for eligible borrowers, VA and USDA can offer zero down for those who qualify, and DPA can cover part of your costs.

Can I combine down payment assistance with a conventional 3% down loan?

• Often yes, if the assistance program allows pairing with conventional loans and your lender participates, but you must meet income, purchase price, and program rules.

How do I check if a property near McKinney is USDA-eligible?

• Use the official USDA eligibility map to verify an address and review income limits for your household size.

Do I need homebuyer education for Texas assistance programs?

• Many TDHCA and TSAHC options require homebuyer education from a HUD-approved provider, which you can complete online through resources listed on the HUD counseling page.