Texas Department of Housing and Community Affairs: Programs and Services

The Texas Department of Housing and Community Affairs (TDHCA) is the state agency responsible for administering affordable housing finance, community energy assistance, and weatherization programs across Texas. Operating under authority granted by the Texas Government Code, Chapter 2306, TDHCA functions as both a regulatory body and a funding conduit, channeling federal and state dollars to local service providers and housing developers. The scope of TDHCA's work touches every county in Texas, making it the primary state-level point of contact for housing affordability and community services policy.

Definition and scope

TDHCA was established as a state agency under Texas Government Code, Chapter 2306 and is governed by a seven-member board appointed by the Governor with Senate confirmation. The department's mandate spans four broad functional areas: multifamily housing finance, single-family programs, the Texas Rent Relief and homelessness programs, and community affairs programs including energy assistance.

The agency administers the federal Low Income Housing Tax Credit (LIHTC) program in Texas, which is the primary mechanism for financing the construction and rehabilitation of affordable rental housing in the state. Under the LIHTC program, TDHCA allocates tax credits to developers who agree to maintain rent restrictions for income-qualified tenants, typically households earning at or below 60 percent of area median income (AMI) (IRS Form 8586, Low-Income Housing Credit).

TDHCA also administers the federal Low Income Home Energy Assistance Program (LIHEAP), funded through the U.S. Department of Health and Human Services, which provides utility payment assistance to qualifying low-income households across Texas (HHS LIHEAP Program).

The agency's scope covers state-chartered housing activities. It does not administer local public housing authorities, which operate independently under the oversight of the U.S. Department of Housing and Urban Development (HUD). Federal mortgage lending programs, including FHA-insured loans, fall under HUD's direct jurisdiction and are not covered by TDHCA's regulatory authority.

How it works

TDHCA's operational structure channels funds through a network of subrecipients — nonprofit organizations, local governments, and private developers — rather than delivering services directly to end recipients in most cases.

The LIHTC allocation process follows an annual competitive cycle governed by the Qualified Allocation Plan (QAP), which TDHCA revises and adopts each year. Applications are scored against criteria including:

  1. Site location and access to services — proximity to transit, grocery, medical facilities
  2. Financial feasibility — debt coverage ratios, per-unit development costs
  3. Developer experience — prior LIHTC compliance history
  4. Community support — letters from local officials and documentation of need
  5. Set-aside compliance — units reserved for populations including veterans, persons with disabilities, and households at 30 percent AMI or below

The HOME Investment Partnerships Program, also administered by TDHCA, provides grants and loans to developers and local governments for affordable housing construction, rehabilitation, and homebuyer assistance (HUD HOME Program).

For energy assistance, TDHCA contracts with approximately 45 local administering agencies statewide — typically community action agencies — that determine eligibility, process applications, and make vendor payments on behalf of qualifying households. Eligibility for LIHEAP in Texas is generally set at or below 150 percent of the federal poverty level, though income thresholds are adjusted by household size (Texas LIHEAP State Plan, TDHCA).

The Weatherization Assistance Program (WAP), funded through the U.S. Department of Energy, operates through the same local agency network, providing energy efficiency improvements — insulation, air sealing, HVAC tune-ups — to owner-occupied and rental units occupied by income-qualified residents.

Common scenarios

TDHCA programs intersect with residents and developers in three primary contexts:

Affordable rental housing development: A nonprofit developer in Dallas or a private developer in San Antonio applies for LIHTC allocations to finance a new 80-unit apartment complex. If awarded, the developer sells the tax credits to institutional investors, generating equity that reduces the debt load and, consequently, the rents charged to tenants.

Homebuyer assistance: A first-time homebuyer with income at or below 80 percent of AMI may qualify for the My First Texas Home program, which provides 30-year fixed-rate mortgage loans and down payment assistance of up to 5 percent of the loan amount (TDHCA My First Texas Home). This program operates through participating lenders statewide.

Utility crisis assistance: A household in a rural county with income below 150 percent of the federal poverty line facing utility disconnection applies through a local administering agency for LIHEAP crisis assistance. The local agency processes the application and issues payment directly to the utility vendor, typically within a defined crisis response window established in TDHCA's program guidelines.

Decision boundaries

Two distinctions govern which TDHCA programs apply to a given situation.

Rental vs. homeownership: LIHTC and multifamily bonds apply exclusively to rental housing. Single-family homebuyer programs, including My First Texas Home and the Mortgage Credit Certificate (MCC) program, apply to owner-occupied purchases. A developer building for-sale townhomes does not qualify for LIHTC; a renter does not qualify for MCC.

State-administered vs. locally-administered: TDHCA sets program rules and monitors compliance, but local public housing authorities (PHAs) — such as the Houston Housing Authority or the Austin Housing Authority — administer Section 8 Housing Choice Vouchers independently under direct HUD oversight. A household seeking a voucher applies to the PHA, not to TDHCA. TDHCA's rental assistance programs, such as the Emergency Rental Assistance programs it administered after 2020, are distinct from the voucher system and have different eligibility and application processes.

TDHCA's jurisdiction is state-level. Programs it administers do not extend to federally operated tribal housing programs, which fall under the Native American Housing Assistance and Self-Determination Act (NAHASDA) and are administered directly by HUD's Office of Native American Programs.

For a broader overview of how TDHCA fits within Texas state government structure, see the Texas Government Authority index. The agency's housing finance activities intersect with the state's fiscal policy, addressed further under Texas State Budget and Finance.

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