FHA Loans in Texas. More Flexible. More Accessible.
Government-backed financing with lower credit requirements and a 3.5% minimum down payment. The most popular path to homeownership for first-time buyers and those rebuilding credit.
An FHA loan is a mortgage insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). Because the government backs the loan, lenders are willing to offer more flexible qualification standards, making FHA loans accessible to a wider range of borrowers.
FHA loans are among the most popular loan types in Texas, particularly for first-time buyers, borrowers with limited down payment savings, or those with credit challenges. As an independent broker, Kris shops FHA rates across 20+ wholesale lenders to make sure you are getting the most competitive pricing available.
Who Qualifies for an FHA Loan?
Credit score of 580+ for 3.5% down (500-579 may qualify with 10% down)
Stable employment history of at least 2 years
Debt-to-income ratio up to 57% in some cases
Primary residence only (no investment properties)
Property must meet FHA appraisal and safety standards
US citizen or lawful permanent resident (FHA removed non-resident alien eligibility in 2025)
Pros and Cons
Advantages
3.5% down payment with 580+ credit score
More flexible debt-to-income ratios than conventional
Gift funds allowed for entire down payment
Available to borrowers with prior bankruptcy or foreclosure
Competitive interest rates due to government backing
Streamline refinance option available later
Things to Consider
Mortgage insurance premium (MIP) required for life of loan in most cases
Upfront MIP of 1.75% added to loan balance
Primary residence only, no investment properties
Property must meet strict FHA appraisal standards
Loan limits lower than conventional in most Texas counties
Frequently Asked Questions
The minimum credit score for an FHA loan with 3.5% down is 580. Borrowers with scores between 500 and 579 may still qualify but will need a 10% down payment. Lender overlays sometimes set a higher minimum, which is why shopping with a broker matters.
FHA loans require two types of mortgage insurance. The upfront MIP is 1.75% of the loan amount, added to your balance at closing. The annual MIP ranges from 0.15% to 0.75% depending on your loan term, loan amount, and down payment, paid monthly.
Yes. FHA allows 100% of your down payment and closing costs to come from gift funds from a family member, employer, or charitable organization. A gift letter is required documenting that the funds are a gift, not a loan.
For FHA loans originated after June 2013 with less than 10% down, MIP stays for the life of the loan. If you put down 10% or more, MIP is removed after 11 years. Many borrowers refinance into a conventional loan once they reach 20% equity to eliminate MIP.
The standard FHA loan limit for most Texas counties in 2026, including all of Houston metro, is $541,287. Higher-cost counties vary: Austin metro counties are $571,550, Dallas-Fort Worth counties are $563,500, and San Antonio metro counties are $557,750. The highest Texas county limit is $813,050. Kris can confirm the exact limit for your county.
Yes. FHA has shorter waiting periods than conventional loans. After a Chapter 7 bankruptcy, you can qualify for an FHA loan after 2 years. After a foreclosure, the waiting period is 3 years. Extenuating circumstances can sometimes reduce these periods.
