New Year, New Home: Navigating Texas FHA Loans for Your Dream Residence - Texas FHA Loans | First Time Buyer Loan (2024)

FAQs

What are the requirements for an FHA loan in Texas? ›

FHA minimum credit score

If you put just 3.5 percent down, the minimum credit score for an FHA loan is 580. You can qualify with a score as low as 500, but you'll need to make at least a 10 percent down payment.

The minimum down payment required for an FHA loan is 3.5%. Keep in mind that you'll need a credit score of 580 or higher to be eligible for the 3.5% down payment. You'll have to put 10% down if you have a credit score of 500 – 579.

First-time homebuyers in Texas usually need to put down a down payment of around 3% to 20% on their loan depending on the type of loan they are using to buy the home. Some loan options (like USDA and VA loans) allow buyers to purchase a home with $0 down.

The three primary factors that can disqualify you from getting an FHA loan are a high debt-to-income ratio, poor credit, or lack of funds to cover the required down payment, monthly mortgage payments or closing costs.

You must have a credit score of at least 580 to qualify for a Texas FHA loan to take advantage of the 3.5% down payment. However, the FHA program accepts applicants with credit as low as 500 if you make a down payment of at least 10%.

Your monthly payment will depend on your interest rate and loan term — or how long your loan lasts. On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 6%, you'd pay $1,498.88 per month for a 30-year term or $2,109.64 for a 15-year one.

You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.

Following the 28/36 rule, you should make roughly triple that amount to comfortably afford the home, which is $72,000 annually. Keep in mind that these calculations do not include the cash you'll need for a down payment and closing costs.

How do I avoid a downpayment on my FHA loan? ›

There is no such thing as a zero-down FHA purchase loan. But you CAN get down payment assistance from a friend, family member, employer, or a third party that meets FHA requirements. Any down payment help you get from one of these sources must meet the same requirements listed above.

FHA loans require a minimum 3.5 percent down payment for borrowers with a credit score of 580 or more. Borrowers with a credit score of 500 to 579 need to put 10 percent down to get an FHA loan. Conventional conforming mortgages only require 3 percent down, and VA and USDA loans require no down payment.

When obtaining an FHA-backed loan in Texas, borrowers must put down a minimum of at least 3.5% of the home's value upfront. Individuals with credit scores from 500-579 will be required to make 10% down payments. However, putting less than 10% down on an FHA loan can cost homebuyers more money in the long run.

We define “first-time home buyer” as any person or family who has not owned, or had an ownership interest in, a home within the past three (3) years.

According to the National Association of Realtors, the average down payment on a house for first-time homebuyers nationwide is 6%. Given that the median home price in Texas is $301,763*, that places the average down payment on a house in Texas at $18,105 for first-time home buyers. Keep in mind that 6% is an average.

While conventional mortgages usually require a credit score of 620 or more, FHA loans are open to borrowers with credit scores as low as 500. You don't need a big down payment. If your credit score is 580 or more, you could qualify to put down just 3.5%. Interest rates are competitive.

FHA loans are often recommended for first-time homebuyers or those with less-than-stellar credit histories because they're generally easier to qualify for, come with more affordable mortgage rates, and require less cash up front to get into a home.

Are there income limits for an FHA mortgage? There's also no maximum income requirement for an FHA loan, so you don't have to worry about earning too much to qualify. These loans are ideal for those who want a lower down payment, and for those with lower credit scores.

FHA Loan Eligibility

Anyone can apply for an FHA Loan – including DACA recipients. All applicants must meet certain loan requirements, including: Proof of steady employment history and verifiable income. A minimum credit score of 580 with a 3.5% down payment.