NHSSA Down Payment Assistance: Everything San Antonio First-Time Buyers Need to Know in 2025

What Is Neighborhood Housing Services of San Antonio (NHSSA)?

Neighborhood Housing Services of San Antonio is a nonprofit organization dedicated to helping Bexar County residents achieve homeownership. Founded to serve the San Antonio community, NHSSA provides down payment assistance, homebuyer education, and housing counseling services to make homeownership accessible to more families.

For first-time homebuyers in San Antonio, NHSSA offers one of the most substantial down payment assistance programs available in Bexar County, providing up to $20,000 to help with down payment and closing costs.

How Much Down Payment Assistance Does NHSSA Provide?

NHSSA offers up to $20,000 in down payment and closing cost assistance for eligible first-time homebuyers purchasing homes in Bexar County. This assistance can be used for:

• Your down payment (the initial payment required by your lender, typically 3-5% of the purchase price)
• Closing costs (fees associated with finalizing your mortgage, typically 2-5% of the purchase price)
• Prepaid items (such as property taxes, homeowners insurance, or mortgage insurance)

This level of assistance is significant. For context, if you're buying a $250,000 home in San Antonio with an FHA loan requiring 3.5% down, your down payment would be $8,750, plus approximately $5,000-$10,000 in closing costs, for a total upfront cost of around $13,750-$18,750. The NHSSA assistance could cover all of these costs.

Who Qualifies for NHSSA Down Payment Assistance in San Antonio?

First-Time Homebuyer Requirement

You must be a first-time homebuyer to qualify for NHSSA assistance. In most programs, "first-time homebuyer" is defined as someone who hasn't owned a home in the past three years. This definition means:

• If you've never owned a home, you qualify
• If you owned a home more than three years ago, you likely qualify
• If you're divorced and your ex-spouse kept the marital home, you may qualify even if it hasn't been three years
• If you're a single parent who owned a home only with a former spouse, special considerations may apply

Credit Score Requirements

NHSSA requires a minimum credit score of 580 for their down payment assistance program. This credit score requirement is more lenient than many traditional mortgage programs, which often require 620 or higher.

A 580 credit score is achievable for many people who have had some credit challenges but have been working to improve their financial situation. If your credit score is below 580, NHSSA also offers credit counseling services to help you improve your score before applying.

Income Limits for Bexar County Residents

NHSSA uses Area Median Income (AMI) guidelines to determine eligibility. While specific income limits vary based on household size and are updated annually, the program is designed to serve low-to-moderate income households, typically those earning up to 80% of the Area Median Income.

For Bexar County, this generally means:

• A single person or couple might have income limits around $45,000-$60,000
• A family of four might have income limits around $65,000-$85,000
• Larger households have proportionally higher limits

These numbers are approximate and change annually based on HUD's calculations of AMI for the San Antonio metropolitan area. Contact NHSSA directly for current income limits specific to your household size.

Residency and Citizenship Requirements

You must:

• Purchase a home within Bexar County, Texas
• Be a U.S. citizen or legal permanent resident
• Plan to use the home as your primary residence (no investment properties or second homes)

Additional Requirements

• Homebuyer education: You must complete a HUD-approved homebuyer education course. NHSSA offers these courses regularly.
• Lender pre-approval: You need to be pre-approved for a mortgage with a participating lender.
• Stable employment: You'll need to demonstrate stable employment history and income.
• Adequate reserves: Some programs require you to have some savings remaining after closing for emergencies.

How Does the NHSSA Second Mortgage Work?

Understanding the Second Mortgage Structure

NHSSA's assistance comes in the form of a second mortgage, which is a loan secured by your home that runs alongside your primary mortgage. Here's how it works:

When you close on your San Antonio home, you'll sign documents for two separate mortgages:

1. Primary Mortgage: This is your main home loan from a traditional lender (bank, credit union, or mortgage company). This is usually the larger loan covering the majority of your home's purchase price.

2. Second Mortgage (NHSSA Loan): This is the down payment assistance loan, up to $20,000, that helps cover your down payment and closing costs.

Both mortgages are secured by your home, meaning if you default on either loan, you could potentially lose your home. However, the primary mortgage has first priority, and the NHSSA second mortgage has second priority.

Repayment Terms

The NHSSA second mortgage must be repaid over time. While specific terms can vary based on funding sources and program updates, key features typically include:

• Loan term: Often structured with payment terms that align with your primary mortgage
• Interest rate: Terms may vary; contact NHSSA for current rate information
• Monthly payments: You'll typically make monthly payments on this second mortgage in addition to your primary mortgage payment
• Balloon payment: Some versions include a balloon payment due when you sell the home or refinance

It's crucial to understand that this is not a grant—you will need to repay this money. However, the terms are designed to be affordable and help you achieve homeownership sooner rather than continuing to save while paying rent.

What Happens If You Sell Your Home?

When you sell your home or refinance your primary mortgage, the NHSSA second mortgage typically becomes due in full. This is paid from the proceeds of your home sale.

For example:

• You buy a home for $250,000 with $20,000 NHSSA assistance
• After five years, your home is worth $290,000
• You still owe $220,000 on your primary mortgage and $18,000 on your NHSSA loan (assuming you've paid down some principal)
• When you sell, you'd receive approximately $52,000 ($290,000 sale price - $220,000 primary mortgage - $18,000 NHSSA loan - selling costs)

The appreciation in your home's value can help ensure you have equity remaining after paying off both mortgages.

The NHSSA Application Process for San Antonio Homebuyers

Step 1: Attend a NHSSA Orientation or Information Session

NHSSA regularly holds orientation sessions where they explain the program, requirements, and process. These sessions help you understand whether you're likely to qualify and what you'll need to prepare.

Step 2: Complete Homebuyer Education

You must complete a HUD-approved homebuyer education course. NHSSA offers these courses, typically available in several formats:

• In-person classes (usually held over one or two days)
• Online self-paced courses
• One-on-one counseling sessions

The course covers essential topics including:

• Understanding different types of mortgages
• The home buying process from search to closing
• Budgeting for homeownership
• Understanding credit and how to improve it
• Home maintenance responsibilities
• Predatory lending and scams to avoid

Upon completion, you'll receive a certificate that you'll need for your application.

Step 3: Get Pre-Approved with a Participating Lender

Not every lender in San Antonio is set up to work with NHSSA's program. You need to work with a lender who:

• Is approved by NHSSA to participate in the program
• Has experience processing NHSSA down payment assistance loans
• Understands the timeline and requirements

NHSSA can provide a list of participating lenders. During pre-approval, the lender will:

• Review your credit report and score
• Verify your income and employment
• Calculate how much home you can afford
• Determine which loan programs (FHA, VA, conventional) you qualify for
• Confirm your eligibility for NHSSA assistance

Step 4: Submit Your NHSSA Application

Once pre-approved by a lender, you'll submit your NHSSA application with required documentation:

• Proof of income (pay stubs, W-2s, tax returns)
• Bank statements showing assets and savings
• Credit report
• Homebuyer education certificate
• Government-issued ID
• Proof of citizenship or legal permanent residency
• Lender pre-approval letter

NHSSA will review your application to verify you meet all program requirements.

Step 5: Get NHSSA Approval

Once NHSSA approves your application, you'll receive an approval letter stating the amount of assistance you're approved for (up to $20,000). This approval is typically valid for a certain period (such as 90-120 days), during which you need to find a home and go under contract.

Step 6: Find Your San Antonio Home

With both lender pre-approval and NHSSA approval in hand, you can confidently shop for homes in Bexar County. Work with a real estate agent who understands down payment assistance programs and their requirements.

Your home must:

• Be located in Bexar County
• Be your primary residence
• Meet minimum property standards (pass inspection)
• Fall within price limits (if applicable)

Step 7: Make an Offer and Go Under Contract

When you find the right home, your real estate agent will help you make an offer. Your offer should include contingencies for:

• Home inspection
• Appraisal
• Financing (including NHSSA approval)

Step 8: Complete the Underwriting Process

Your lender will order an appraisal, review all final documentation, and work with NHSSA to coordinate both loans. NHSSA will verify that the property meets their requirements.

Step 9: Close on Your Home

At closing, you'll sign documents for both your primary mortgage and the NHSSA second mortgage. The NHSSA funds will be applied to your down payment and closing costs, reducing the amount of cash you need to bring to closing.

What Types of Homes Can You Buy with NHSSA Assistance?

NHSSA assistance can be used to purchase various types of properties in Bexar County:

Eligible Property Types

• Single-family homes: Detached houses are the most common property type
• Townhomes: Attached homes with individual ownership
• Condominiums: Must be in an FHA-approved or warrantable condominium project
• Manufactured homes: Must meet specific criteria and be on a permanent foundation with owned land

Property Condition Requirements

The home must meet minimum property standards, which means:

• Safe, sound, and structurally secure
• Free from health and safety hazards
• All major systems (heating, plumbing, electrical) must be functional
• No significant deferred maintenance or needed repairs
• Meets appraisal standards for the loan type you're using

If the home inspection reveals issues, you may need to negotiate with the seller to make repairs before closing, or the property may not qualify for the program.

Location Requirements

The property must be located within Bexar County, Texas. This includes:

• San Antonio (all areas)
• Surrounding communities like Schertz, Converse, Universal City, Helotes, Leon Valley, Castle Hills, Olmos Park
• Unincorporated areas of Bexar County

You cannot use NHSSA assistance for properties outside Bexar County, even if they're in the greater San Antonio metropolitan area.

NHSSA vs. Other San Antonio Down Payment Assistance Programs

NHSSA vs. My First Texas Home

NHSSA Advantages:

• Higher maximum assistance ($20,000 vs. up to 5% of loan amount)
• Lower credit score requirement (580 vs. 620)
• Local organization with in-person support in San Antonio

My First Texas Home Advantages:

• Statewide program with more participating lenders
• 0% interest second mortgage
• Can provide competitive interest rates on primary mortgage
• May have higher income limits depending on household size

Best choice: If you have a credit score between 580-619, NHSSA may be your only option. If you have a 620+ score, compare both programs to see which offers better terms for your situation.

NHSSA vs. Opportunity Home San Antonio

Opportunity Home San Antonio is another local organization that works on affordable housing. While they focus more on building and selling new affordable homes to qualified buyers, NHSSA's program works with existing homes throughout Bexar County. These programs can sometimes work together or complement each other depending on your specific situation.

Combining NHSSA Assistance with Different Loan Types

NHSSA with FHA Loans

FHA loans are the most common primary mortgage type used with NHSSA assistance because:

• FHA loans require only 3.5% down (lower than conventional)
• FHA has more lenient credit requirements (as low as 580 credit score)
• FHA allows higher debt-to-income ratios
• FHA permits down payment assistance from nonprofits like NHSSA

If you're buying a $250,000 home with FHA financing:

• Required down payment: $8,750 (3.5%)
• Estimated closing costs: $7,500
• Total needed: $16,250
• NHSSA could cover: Up to $16,250 of this amount

NHSSA with VA Loans

If you're a veteran buying in San Antonio, you can potentially use NHSSA assistance with a VA loan. However, since VA loans don't require a down payment, NHSSA assistance would primarily help with:

• Closing costs
• Prepaid items
• Funding fee (if you choose not to finance it)

This can help you purchase with minimal cash out of pocket.

NHSSA with Conventional Loans

Conventional loans typically require higher credit scores (usually 620-640 minimum) and may require 5-10% down payment. NHSSA assistance can be used with conventional loans, though:

• You'll need to meet the higher credit score requirements of both NHSSA (580+) and conventional lending standards (typically 620+)
• The second mortgage may affect your debt-to-income ratio calculations
• Some conventional loan programs have restrictions on seller concessions and assistance amounts

Tips for Success with NHSSA Down Payment Assistance

Start Early

The process from initial inquiry to closing can take several months. Starting early gives you time to:

• Complete homebuyer education without rushing
• Improve your credit score if needed
• Save additional funds for reserves
• Research neighborhoods and property options

Work on Your Credit

Even though NHSSA requires only a 580 credit score, a higher score can:

• Help you get better interest rates on your primary mortgage
• Qualify you for additional programs
• Make the underwriting process smoother
• Increase your chances of approval

Pay down credit card balances, make all payments on time, and avoid opening new credit accounts while going through the process.

Save Additional Money

While NHSSA can provide up to $20,000, having additional savings shows financial responsibility and provides:

• Reserves for unexpected expenses after moving in
• Flexibility if closing costs exceed the assistance amount
• Cushion for emergencies
• Money for moving expenses, new furniture, or immediate home needs

Most lenders like to see at least 1-2 months of housing payments in reserves after closing.

Choose Your Real Estate Agent Wisely

Work with a San Antonio real estate agent who:

• Has experience with down payment assistance programs
• Understands NHSSA requirements and timelines
• Can help you find homes that meet program criteria
• Will advocate for you during negotiations
• Is patient with the additional steps involved in DPA programs

Ask potential agents: "Have you worked with buyers using NHSSA assistance before?" and "How many NHSSA transactions have you closed?"

Be Realistic About What You Can Afford

Just because you're approved for NHSSA assistance and a certain loan amount doesn't mean you should maximize your budget. Consider:

• Total monthly payment including primary mortgage, NHSSA payment, insurance, taxes, and HOA (if applicable)
• Maintenance and repair costs
• Utilities
• Your other financial goals and obligations

A good rule of thumb is keeping your total housing payment below 28-30% of your gross monthly income.

Ask Questions

Don't hesitate to ask NHSSA, your lender, or your real estate agent questions about anything you don't understand. This is likely your largest financial transaction, and you should be completely comfortable with every aspect of the process.

Common Mistakes to Avoid When Using NHSSA Assistance

Mistake 1: Waiting Until After You Find a Home

Don't wait to apply for NHSSA assistance until after you've found a home you want to buy. The approval process takes time, and sellers often prefer buyers who have all their financing lined up. Get your NHSSA approval before you start seriously house hunting.

Mistake 2: Not Maintaining Your Credit During the Process

Once you're approved and under contract, don't:

• Make large purchases on credit
• Apply for new credit cards or loans
• Change jobs without discussing with your lender first
• Make large deposits or withdrawals from your bank accounts without documentation

Any of these actions can derail your loan approval even at the last minute.

Mistake 3: Skipping the Home Inspection

Some buyers try to make their offers more attractive by waiving the inspection contingency. This is risky with any home purchase, but especially when using down payment assistance, because:

• The home must meet minimum property standards
• Unexpected repairs can be costly
• You'll have limited savings after closing
• Issues discovered after closing become your responsibility

Always get a professional home inspection.

Mistake 4: Not Understanding the Repayment Obligation

Remember that NHSSA assistance is a loan, not a grant. You'll need to make payments on this second mortgage in addition to your primary mortgage payment. Make sure you understand:

• The total monthly payment amount for both mortgages
• How long you'll be making payments
• What happens if you want to sell or refinance
• The consequences of missed payments

Mistake 5: Overlooking Other Available Assistance

Sometimes buyers can combine NHSSA assistance with:

• Seller concessions (seller-paid closing costs)
• Lender credits
• Gift funds from family (within program limits)

Work with your lender to maximize all available resources while staying within program guidelines.

Life After Closing: Managing Your NHSSA Loan

Making Your Monthly Payments

After closing, you'll receive information about making payments on your NHSSA second mortgage. Set up automatic payments if possible to ensure you never miss a payment. Missing payments can:

• Damage your credit score
• Result in late fees
• Potentially lead to default and foreclosure

Maintaining Your Home

As a homeowner, you're responsible for all maintenance and repairs. Create a budget for:

• Routine maintenance (HVAC servicing, lawn care, etc.)
• Unexpected repairs (plumbing issues, appliance failures)
• Improvements and updates

Having an emergency fund specifically for home maintenance is crucial, especially in your first few years of homeownership.

Building Equity

As you make payments on your mortgages and your home appreciates in value, you're building equity. This equity can:

• Allow you to refinance to better terms in the future
• Provide funds for major improvements through a home equity loan
• Contribute to your net worth
• Provide proceeds when you eventually sell

Preparing for the Future

Whether you plan to stay in your home long-term or eventually upgrade, keep in mind:

• The NHSSA loan will need to be repaid when you sell or refinance
• Building and maintaining good credit will help with future home purchases
• Continuing to save will give you more options down the road

Is NHSSA Down Payment Assistance Right for You?

NHSSA down payment assistance is an excellent option for San Antonio first-time homebuyers who:

• Meet the credit, income, and other eligibility requirements
• Are purchasing in Bexar County
• Need significant help with down payment and closing costs
• Are committed to homeownership and understand the responsibilities
• Have stable employment and income to afford both mortgage payments

If you're unsure whether you qualify or whether this is the right program for you, contact