Homeownership is a cornerstone of life for many Texans. It represents stability, independence, and long-term financial security. Yet even the most responsible homeowners can face unexpected hardships. Job loss, medical expenses, rising costs, or economic downturns can quickly make it difficult to keep up with mortgage payments. When this happens, the threat of foreclosure becomes a frightening reality.

The good news is that Texas offers a variety of homeowner assistance programs designed to help struggling families avoid foreclosure and regain financial footing. Understanding how these programs work—and knowing what other options are available—can make all the difference for homeowners facing difficult times.

Understanding Foreclosure and Why It Happens

Foreclosure is a legal process that allows a lender to take possession of a property when the homeowner fails to make required mortgage payments. While foreclosure laws vary from state to state, the result is the same: the homeowner risks losing their house and the equity they have built over the years.

Foreclosures often occur due to circumstances outside a homeowner’s control, such as:

  • Loss of employment

  • Reduction in income

  • Serious illness or medical bills

  • Divorce or family changes

  • Rising insurance, tax, or living costs

  • Natural disasters or emergencies

During periods of economic uncertainty—such as the COVID-19 pandemic—many households experienced sudden financial strain. Even homeowners who had never missed a payment before found themselves struggling to keep up.

Recognizing this risk, federal, state, and local governments created programs to help homeowners stay in their homes and avoid the long-term damage that foreclosure can cause.

Homeowner Assistance Programs in Texas

Texas provides several programs and resources aimed at helping homeowners prevent foreclosure, manage financial hardship, and keep their homes. These programs are offered through state agencies, nonprofit organizations, and federal partnerships.

Texas Department of Housing and Community Affairs (TDHCA)

The Texas Department of Housing and Community Affairs (TDHCA) plays a central role in administering housing assistance programs throughout the state. While many of its programs are focused on affordable housing and first-time buyers, the agency also supports initiatives that can help existing homeowners facing financial challenges.

Homeowner Assistance Programs

During and after the pandemic, Texas administered federally funded homeowner relief programs designed to help families who fell behind on mortgage payments, property taxes, or utility bills due to financial hardship. These programs provided direct financial assistance to eligible homeowners to help them bring accounts current and avoid foreclosure.

Although specific program names and funding availability may change over time, the goal remains the same: to offer temporary financial help to homeowners experiencing a verifiable hardship.

Mortgage Credit Certificate (MCC) Program

The Mortgage Credit Certificate program helps make homeownership more affordable by providing a federal tax credit based on a portion of mortgage interest paid each year. While this program is primarily designed for first-time buyers, it can reduce monthly financial pressure for qualifying homeowners and lower the risk of future payment difficulties.

First-Time Homebuyer and Down Payment Assistance

While not foreclosure-specific, TDHCA programs that help Texans purchase homes with affordable rates and down payment assistance can reduce the likelihood of foreclosure by promoting sustainable, affordable homeownership from the start.

Assistance for Texas Veterans

Texas offers some of the strongest veteran support programs in the country, including specialized housing assistance through the Texas Veterans Land Board (VLB).

Veterans Housing Assistance

The Veterans Land Board provides low-interest home loans to eligible Texas veterans and their spouses. By offering below-market interest rates and favorable loan terms, these programs help veterans maintain affordable payments and reduce the risk of foreclosure.

Emergency Financial Help for Veterans

When veterans experience a temporary financial setback, certain state and nonprofit programs may provide short-term mortgage payment assistance to help them catch up and remain in their homes.

Veterans facing financial hardship are encouraged to explore veteran-specific resources in addition to general homeowner assistance programs available to all Texans.

Free Help Through Housing Counseling Agencies

One of the most valuable—and often overlooked—resources for Texas homeowners is access to HUD-approved housing counseling agencies.

These nonprofit organizations offer free or low-cost services that include:

  • Reviewing mortgage options

  • Communicating with lenders

  • Creating household budgets

  • Exploring loan modification or repayment plans

  • Understanding foreclosure prevention programs

Housing counselors do not lend money, but they help homeowners navigate complicated financial decisions and avoid common mistakes. For many families, professional counseling is the first and most important step toward finding a solution.

A directory of HUD-approved counselors can be found through the U.S. Department of Housing and Urban Development website.

Steps to Take When Facing Foreclosure in Texas

Every assistance program has its own eligibility rules and application procedures, but most follow a similar general process. Homeowners who are struggling with payments should consider these steps:

1. Act Early

The earlier a homeowner seeks help, the more options are available. Waiting until foreclosure proceedings have already begun can limit potential solutions.

2. Contact Your Mortgage Servicer

Many lenders offer hardship programs, repayment plans, or temporary forbearance options. Reaching out directly to the mortgage servicer is an essential first step.

3. Explore State and Local Programs

Texas homeowners should research currently available assistance programs through state housing agencies, local governments, and nonprofit organizations.

4. Gather Financial Documents

Most programs require proof of hardship and income, including:

  • Recent pay stubs or unemployment documentation

  • Bank statements

  • Mortgage statements

  • Tax returns

  • Utility bills

Having these documents organized can speed up the application process.

5. Speak With a Housing Counselor

A HUD-approved housing counselor can help homeowners understand which options best fit their situation and guide them through applications.

Additional Options If Assistance Programs Are Not Available

Not every homeowner will qualify for state or federal aid, and funding for assistance programs can be limited. If direct financial help is not an option, there are still several alternatives that may help prevent foreclosure.

Loan Modification

A loan modification changes the terms of an existing mortgage to make payments more affordable. This may include:

  • Lowering the interest rate

  • Extending the loan term

  • Adding missed payments to the balance

  • Reducing the principal in rare cases

Loan modifications are one of the most common long-term foreclosure prevention tools.

Forbearance Plans

For homeowners experiencing a temporary hardship, lenders may allow payments to be paused or reduced for a period of time. After the forbearance ends, the homeowner works with the lender to repay the missed amounts.

Repayment Plans

Some lenders will allow homeowners to gradually catch up on missed payments by adding a portion of the past-due balance to regular monthly payments.

Refinancing

If a homeowner still has good credit and sufficient equity, refinancing into a new loan with better terms may reduce monthly payments and improve affordability.

Selling the Home

When keeping the home is no longer realistic, selling may be the best financial decision. Options include:

  • Traditional sale

  • Short sale with lender approval

  • Deed in lieu of foreclosure

While difficult, these options can help homeowners avoid the long-term credit damage caused by foreclosure.

Legal Options

In certain circumstances, legal tools such as Chapter 13 bankruptcy may allow homeowners to stop foreclosure and create a structured repayment plan to catch up on missed mortgage payments over time. Because bankruptcy laws are complex, homeowners should always seek qualified legal advice before pursuing this path.

Foreclosure Trends in Texas: What Homeowners Should Know

Before 2020, Texas generally had lower foreclosure rates than many other states due to a strong economy and steady job growth. The COVID-19 pandemic changed the landscape dramatically, creating financial challenges for thousands of households.

Impact of Pandemic Relief Measures

Federal and state foreclosure moratoriums temporarily paused many foreclosure actions, giving homeowners time to recover. Mortgage forbearance programs also allowed borrowers to delay payments without immediate penalties.

Post-Moratorium Challenges

As moratoriums expired, some homeowners faced difficulty catching up on missed payments. However, ongoing assistance programs, improving employment conditions, and a strong Texas housing market helped prevent a dramatic surge in foreclosures.

Current Factors That Influence Foreclosure Risk

Looking forward, several elements continue to affect foreclosure trends in Texas:

  • Employment levels and wage growth

  • Inflation and rising living costs

  • Property tax increases

  • Interest rate changes

  • Availability of assistance programs

  • Local housing market conditions

Understanding these factors can help homeowners anticipate challenges and seek help before problems escalate.

Taking Control of the Situation

Facing foreclosure can feel overwhelming and isolating, but Texas homeowners are not without options. From state assistance programs and nonprofit counseling to lender solutions and legal alternatives, many paths exist to help families stay in their homes.

The most important step is to take action early. Ignoring the problem rarely makes it go away. Reaching out for help, gathering information, and exploring all available resources can dramatically improve the chances of finding a workable solution.

Final Thoughts

Homeownership remains a vital part of life for millions of Texans. While financial hardships can threaten that stability, a wide range of programs and resources are available to help homeowners avoid foreclosure and rebuild financial security.

Whether through state assistance, housing counseling, lender programs, or other options, struggling homeowners have more support than ever before. With the right information and proactive steps, many Texans can overcome financial setbacks and protect the homes they have worked so hard to achieve.

If you are facing difficulty making mortgage payments, remember that help is available—and you do not have to navigate the process alone.