To qualify for an FHA loan in Texas, you need a credit score of at least 580 for the minimum 3.5% down payment, a debt-to-income ratio at or below 43%, and enough savings to cover closing costs and the upfront mortgage insurance premium. The property itself must also meet FHA safety and livability standards. Texas has some unique advantages for FHA borrowers, including state-run down payment assistance programs that can make homeownership more accessible.
Credit Score and Down Payment Thresholds
FHA loans are designed for borrowers who may not qualify for conventional financing, but they still have minimum credit requirements. If your credit score is 580 or higher, you can put down as little as 3.5% of the purchase price. If your score falls between 500 and 579, you can still get an FHA loan, but you’ll need to bring at least 10% as a down payment. Scores below 500 are generally ineligible.
Keep in mind that these are FHA minimums. Individual lenders often set their own cutoffs higher, sometimes requiring a 620 or 640 score. If one lender turns you down, it’s worth shopping around, because another FHA-approved lender may have more flexible requirements. Your down payment can come from savings, a gift from a family member, or a down payment assistance program.
Debt-to-Income Ratio Limits
FHA guidelines use two debt-to-income (DTI) ratios to evaluate whether you can handle a mortgage payment alongside your other obligations. Your front-end ratio, which compares your projected monthly mortgage payment to your gross monthly income, should not exceed 31%. Your back-end ratio, which includes the mortgage payment plus all other recurring debts like car loans, student loans, and minimum credit card payments, should stay at or below 43%.
These aren’t hard walls in every case. FHA allows lenders to approve borrowers above those thresholds when compensating factors exist. A large down payment of 10% or more, significant cash reserves after closing, or a strong history of making housing payments on time can help you get approved even if your ratios run slightly high. For borrowers purchasing energy-efficient homes that qualify under FHA’s Energy Efficient Homes program, the limits stretch to 33% on the front end and 45% on the back end.
FHA Loan Limits in Texas
FHA loans have a maximum amount you can borrow, and the limit varies by county based on local home prices. For 2026, the floor in Texas is $541,287 for a single-family home, which applies to most counties across the state. In higher-cost areas, the limit rises, with the highest possible FHA loan limit in Texas reaching $813,050 for a single-family home.
If the home you want to buy exceeds your county’s FHA loan limit, you would need to cover the difference with a larger down payment or explore other loan types. You can look up your specific county’s limit on HUD’s website before you start house hunting.
Mortgage Insurance Premiums
Every FHA loan requires mortgage insurance, which protects the lender if you default. This comes in two parts, and both affect your overall cost.
First, there’s an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount. On a $250,000 loan, that’s $4,375. Most borrowers roll this into the loan balance rather than paying it out of pocket at closing.
Second, you’ll pay an annual mortgage insurance premium, broken into monthly installments added to your mortgage payment. The exact rate depends on your loan amount, down payment, and loan term. If you put down at least 10%, you pay the annual premium for only 11 years. If you put down less than 10%, the premium stays for the life of the loan. This is one of the key cost differences between FHA and conventional loans, where private mortgage insurance can be removed once you reach 20% equity.
Property Requirements
FHA loans aren’t just about your finances. The home you’re buying must pass an FHA appraisal, which evaluates both the property’s market value and its condition. The appraiser follows HUD’s minimum property standards, checking that the home is safe, structurally sound, and livable. Specifically, the property must have:
- An undamaged exterior, foundation, and roof
- Safe and reasonable property access
- All utilities (gas, electricity, water, sewage) functioning properly
- A working permanent heating system adequate for the home
- No loose wiring or exposed electrical systems
- Surfaces free of chipping or peeling lead-based paint
- No wood-destroying insect infestations
- No major health or safety hazards, such as missing handrails on steep staircases
- Adequate ventilation in crawl spaces and access to attic areas
- Access to potable water
A home with a structural crack in the foundation or other major defects that make it unlivable will typically not qualify. If the appraiser flags issues, the seller may need to make repairs before the loan can close. This is worth knowing upfront if you’re considering a fixer-upper, because FHA loans are generally not suited for homes that need significant work (though the FHA 203(k) rehabilitation loan is an option for that situation).
Texas Down Payment Assistance Programs
Texas offers state-run programs that pair well with FHA loans and can reduce or eliminate the cash you need at closing. The Texas Department of Housing and Community Affairs (TDHCA) runs a Homebuyer Program that provides down payment assistance alongside low-interest mortgages. To use it, you’ll need to complete a homebuyer education course, pass an eligibility check based on income and purchase price limits, and work with a TDHCA-approved lender.
The Texas State Affordable Housing Corporation (TSAHC) operates similar programs. These programs typically offer assistance as a grant or a forgivable second loan, meaning you may not have to repay it if you stay in the home for a set number of years. Eligibility requirements vary but generally target first-time buyers or buyers purchasing in specific areas. Even if you’ve owned a home before, some of these programs may still be available to you depending on your income and where you’re buying.
Employment and Income Documentation
FHA lenders will verify that you have steady income sufficient to support the mortgage payment. You’ll typically need to provide two years of tax returns, recent pay stubs covering at least 30 days, W-2 forms for the past two years, and bank statements showing your savings and the source of your down payment. Self-employed borrowers should expect to provide two years of business tax returns as well.
Gaps in employment don’t automatically disqualify you, but the lender will want an explanation and evidence that you’re now earning stable income. If you recently changed jobs, that’s usually fine as long as you’re in the same field or your income has improved. FHA guidelines are more forgiving than conventional loans in this area, but documentation is still thorough.
Steps to Get Started
Once you understand the requirements, the process follows a straightforward path. Get pre-approved by an FHA-approved lender so you know exactly how much you can borrow. If you plan to use a Texas assistance program, complete the required homebuyer education course and check your eligibility through TDHCA or TSAHC early, because these programs work through specific participating lenders.
After pre-approval, find a home within FHA loan limits for your county. Make an offer, and once it’s accepted, the lender will order the FHA appraisal. If the home passes, you move through underwriting, finalize your paperwork, and close. The entire process from pre-approval to closing typically takes 30 to 45 days, though delays can happen if the appraisal turns up required repairs or if documentation takes longer to verify.