FHA Loans in Texas
Texas is one of the top FHA loan states by volume, driven by population growth in Dallas-Fort Worth, Houston, Austin, and San Antonio. FHA\'s 3.5% down payment requirement and 580 credit minimum make it especially valuable in fast-appreciating Texas metros where first-time buyers struggle to save 20% down.
Texas State Affordable Housing Corporation (TSAHC) and Texas Department of Housing and Community Affairs (TDHCA) both offer down-payment assistance specifically designed to stack with FHA loans. TSAHC\'s Homes for Texas Heroes Loan Program covers teachers, public servants, and corrections officers; the Homes Sweet Texas Home program serves moderate-income buyers more broadly. TDHCA\'s My First Texas Home offers similar assistance.
Texas property taxes are among the highest in the country (1.6%-2.5%), and FHA underwriting uses the full PITI calculation including taxes and insurance for DTI. This means Texas FHA buyers should plan for higher monthly payments than the same home price would generate in lower-tax states. The tradeoff is significantly lower home prices in most Texas metros than comparable coastal markets.
Stacking opportunities in Texas
Programs and benefits that layer on top of your FHA Loan for additional savings.
- +TSAHC Homes for Texas Heroes — DPA up to 5% for public service workers
- +TSAHC Homes Sweet Texas Home — DPA up to 5% for moderate-income buyers
- +TDHCA My First Texas Home — DPA and discounted first mortgage rates
- +Texas Mortgage Credit Certificate — federal tax credit up to $2,000/yr
Frequently asked questions
How do Texas property taxes affect FHA qualification?+
Texas effective property tax rates of 1.6%-2.5% can add $300-$700+ per month to PITI on a typical home. FHA uses the full PITI calculation for DTI, so Texas buyers qualify for less home than the same income would buy in low-tax states. Verify the actual property tax estimate including any MUD or PID levies before committing — newer subdivisions often have higher total rates.
Which DPA stacks best with FHA in Texas?+
TSAHC and TDHCA both offer DPA programs designed to layer with FHA. TSAHC\'s Homes for Texas Heroes is the most generous for eligible public service workers (teachers, police, firefighters, etc.). Homes Sweet Texas Home is the broader program for moderate-income buyers. Both stack with FHA financing and can reduce out-of-pocket cash to closing significantly.
Can I use FHA for new construction in Texas?+
Yes. Many Texas production builders (DR Horton, Lennar, Pulte, KB Home) actively work with FHA financing. Builder incentives (rate buydowns, closing-cost credits) are often available when using the builder\'s preferred lender. Always compare the builder\'s lender quote against an independent FHA lender to make sure you\'re getting the best deal.
What FHA loan limits apply in Texas?+
Most Texas counties use the baseline FHA limit ($498,257 for single-family in 2026). Travis County (Austin) has a higher limit reflecting Austin\'s appreciation, but it\'s still below high-cost coastal markets. For loans above the FHA limit, conventional or jumbo financing applies — verify your county\'s specific FHA limit before assuming.