Buying a first home in Frisco, Texas
Frisco's down payment assistance program is not open to everyone. It is written for City of Frisco and Frisco ISD employees, its income ceiling is far higher than most people assume, and in this market the price cap is not what stops you.
Who is Frisco's down payment assistance program actually for?
Employees of the City of Frisco or Frisco Independent School District, and nobody else. This is the single most important fact about it and it is the one no national roundup mentions. One applicant must be a full-time employee of the City or of Frisco ISD, and must have been for at least six months. If that does not describe your household, the city program is not available to you and the statewide TDHCA and TSAHC programs are where to look instead.
- One applicant must be a full-time City of Frisco or Frisco ISD employee for a minimum of six months.
- The employment tie continues after closing: if you stop working for the City or FISD inside five years, the unforgiven balance becomes repayable.
- The property must be inside Frisco city limits, which the City determines by whether it is the billing municipality for your water.
- Source, and the document every figure on this page is read from: friscotexas.gov
What does the Frisco program pay, and what does it cost later?
A maximum of $10,000, as a single lien from the City at zero percent interest, structured as a five-year deferred forgivable loan. Twenty percent is forgiven for each full year you live in the home, so it clears completely at five years. The exact amount is not settled until the closing disclosure shows the real closing costs, and it can go toward down payment, closing costs, prepaids or discount points.
The forgiveness is taxable, and the repayment triggers are wider than most
Each year's forgiven twenty percent is reported as non-cash income. For City employees it appears on the bi-weekly paycheck; Frisco ISD employees receive an annual 1099. The unforgiven remainder becomes repayable on any of four triggers inside the five years, and one of them is about your job rather than your house.
- The home is sold.
- The home is no longer your primary residence.
- The home is refinanced to take cash out.
- You are no longer employed by the City of Frisco or Frisco ISD.
| The gate | What the policy says | Why it matters here |
|---|---|---|
| Who qualifies | One applicant a full-time City of Frisco or Frisco ISD employee, six months minimum | The gate almost nobody expects, and the one that rules most searchers out |
| Household income ceiling | At or below $146,158, from the American Community Survey, updated annually | Far higher than the 80% AMI ceilings most assistance uses |
| Sale price ceiling | $563,500, from HUD, updated annually | Generous for this program category, and see below on why it is not the binding limit |
| Assistance | Up to $10,000, 0% interest, 5-year deferred forgivable, 20% forgiven a year | Forgiven amounts are reported as non-cash income each year |
| Your own money | 1% of the purchase price must come from personal funds | There is a personal contribution even with assistance |
| Liquid assets | Anything over $20,000 must go into the purchase first | Savings above the threshold reduce what the program will add |
| The house | Must pass a Texas Minimum Construction Standards inspection; pre-1978 homes get a lead paint assessment | A condition gate, the same shape as the one on FHA and other program loans |
Is the price cap the thing that stops you in Frisco?
No, and this is where Frisco differs from the rest of the metroplex. The program will fund a house up to $563,500, which is a high ceiling for assistance of this kind. The problem in this submarket is the other end. Brad, who shops it, puts it plainly: "I've seen things in Frisco for three fifty that aren't bad, three thirty, but anything below that, and you're talking usually about a half duplex or something like that." So the ceiling is comfortable and the floor is what bites. That is the reverse of Dallas, where a $342,000 city price cap rules houses out rather than in.
And the cheaper towns nearby are not what they were
Buyers priced out of Frisco are often pointed north and east, and Brad's read of those towns is that the advice is dated. On Aubrey and Celina: "Aubrey is not cheap anymore. Celina is not cheap." On why: "a lot of the really affordable stuff is already built and it's not so affordable anymore. And what they're building now isn't very affordable, isn't as affordable. And the taxes are high in some of the areas." Two things are worth taking from that. Supply of the genuinely cheap stock is finite and largely spent, and the tax line in a newer development can undo the saving on the price.
Where should a Frisco buyer start?
With the employment question, because it settles which lane you are in before anything else matters. If someone in the household works for the City of Frisco or Frisco ISD, the city program is worth the paperwork and applications are first come, first served, with completed applications due sixty days before closing. If not, the statewide programs are the route, and the practical question becomes which submarket your budget actually reaches once the tax line is in the payment. Nothing here is an approval, and a lender decides what a lender decides.
Want this checked against your own situation?
The free class covers the whole picture in 45 minutes. Or take two minutes and see which programs are worth a look for someone in your position.