Pillar guide
FHA loans in Texas
Everything a Texas buyer or homeowner needs to understand about FHA financing: limits, credit, down payment, mortgage insurance, and which program fits.
Why FHA is so widely used in Texas
Texas combines fast population growth, a large share of first-time buyers, and some of the highest property tax rates in the country. That last part matters more than people expect: a Texas payment carries a heavier escrow load than the same price in a low-tax state, so the flexibility FHA offers on down payment and debt-to-income does real work here. FHA also has no income limit and no first-time-buyer requirement, which keeps it usable across the whole market.
The core FHA rules
- Down payment: 3.5% with a 580 or higher credit score; 10% for scores from 500 to 579. Gift funds from family are allowed for the entire amount.
- Mortgage insurance: a 1.75% upfront premium, usually financed into the loan, plus a monthly premium. On most 3.5%-down loans the monthly premium stays for the life of the loan.
- Occupancy: primary residences only. FHA does not finance investment property.
- Loan limits: set per county and updated each January. Most of Texas is at $541,287 for a single-family home in 2026, with higher ceilings in the Austin, DFW, and San Antonio metros.
- Appraisal: FHA appraisals include minimum property condition standards. Peeling paint, exposed wiring, and roof issues can require repairs before closing.
Texas-specific things to plan for
Property tax rates commonly run between 1.7% and 2.4% of value depending on county and municipal overlays, and homeowners insurance is elevated statewide because of hail, wind, and coastal exposure. Along the Gulf you may also need separate windstorm and flood coverage. All of that lands in your escrow payment, so a realistic quote has to price the actual county and property, not a statewide average. Texas also applies specific homestead rules to cash-out refinances, which changes the disclosure and closing process on those loans.
Which FHA program fits
- FHA Purchase
- FHA Refinance
- Streamline Refinance
- Cash-Out Refinance
- 203(k) Renovation
- First-Time Buyer
- Self-Employed Borrowers
If your home was destroyed or badly damaged in a presidentially declared disaster, there's also FHA 203(h) disaster recovery financing, which allows 100% financing for eligible borrowers.