Texas Home Loans: A Complete Guide to Buying, Financing, and Refinancing in the Lone Star State

Texas home loans give you a path to one of the most active housing markets in the country. From the Houston metro to Dallas-Fort Worth, Austin, San Antonio, and the smaller towns in between, Texas combines strong job growth, no state income tax, and a wide spread of home prices that can fit almost any budget. If you are thinking about buying, refinancing, or moving up to a larger home in Texas, this guide is designed to help you understand your options clearly.

I am Adam Buttermore, a Producing Branch Manager with Fairway Independent Mortgage Corporation, based in Houston, TX. With over 20 years in the lending industry, I have helped Texas buyers, sellers, and investors close thousands of home loans. Whether you are a first-time buyer who needs help understanding what you can qualify for, a self-employed entrepreneur who needs a loan that fits non-traditional income, or a retiree exploring your options, this guide will walk you through what is available across the state.

This is not a sales pitch. It is a straightforward look at how mortgages work in Texas, the loan programs available, how down payments and assistance programs come into play, and what to expect in the process. By the end, you should have a clearer view of your options and a stronger sense of the next step that fits your situation.

The Texas Housing Market in 2026

Texas is one of the largest and most varied housing markets in the country. The state has continued to add population year after year, drawing buyers from California, the Northeast, and the Midwest who are looking for more home for the money, lower taxes overall, and a strong job market. That growth has been concentrated in the four big metros, Houston, Dallas-Fort Worth, Austin, and San Antonio, but it has also pushed prices and demand into smaller cities like Tyler, Waco, College Station, Killeen, and the Rio Grande Valley.

Texas median home prices vary significantly by metro. Houston and San Antonio tend to sit closer to the national median, while Austin pushes well above it and certain rural counties remain very affordable. Property taxes are higher than the national average, which Texas borrowers offset against the lack of a state income tax. When you are running mortgage scenarios, your monthly payment math has to account for that property tax line, and your loan officer should be modeling it from day one.

For 2026, the Texas conforming loan limit is $832,750 in most counties, which sets the line between conventional and jumbo financing. Knowing where your purchase falls relative to that number can change your loan options, your down payment requirements, and the underwriting standards you will face.

Texas Home Loan Programs at a Glance

Most Texas buyers fit into one of five main loan categories. Each has its own qualification criteria, down payment minimums, and tradeoffs. Here is how to think about them.

Conventional Loans

Conventional loans are the most common type of mortgage and the most flexible. They are not backed by a government agency, which means qualification standards are stricter, but they also let qualified borrowers drop mortgage insurance once enough equity is built. Down payments range from as little as 3 percent on programs like HomeReady and Home Possible up to 20 percent or more for buyers who want to skip private mortgage insurance entirely.

Conventional loans cover most Texas price points up to the conforming limit. Once you go above that limit, you move into jumbo territory.

FHA Loans

FHA loans are insured by the Federal Housing Administration and built to make homeownership accessible to buyers who might not qualify for conventional financing. They allow down payments as low as 3.5 percent and have more flexible credit guidelines than conventional. The tradeoff is mortgage insurance premium (MIP) for most of the loan’s life and stricter property condition requirements at the appraisal.

FHA tends to fit first-time buyers, buyers rebuilding credit after a setback, and buyers who want to keep more cash in reserves. Texas FHA loan limits also rise with the conforming limit each year, so most properties under the conventional cap are eligible.

VA Loans

VA loans offer some of the most favorable terms in mortgage lending for eligible veterans, active-duty service members, and surviving spouses. They allow zero down payment and carry no monthly mortgage insurance. Texas has one of the largest active-duty and veteran populations in the country, with bases including Joint Base San Antonio, Fort Cavazos (formerly Fort Hood), Sheppard Air Force Base, NAS Corpus Christi, and NAS Kingsville. VA financing is a cornerstone of Texas home buying for those who have served.

VA loans do come with a funding fee, which can be rolled into the loan or waived for certain eligible veterans, and the property has to meet VA condition requirements. The benefit is significant, and many Texas military families use VA more than once over a career.

USDA Loans

USDA loans provide zero-down financing for buyers purchasing in eligible rural and suburban areas. Texas has a wide footprint of USDA-eligible territory, including rural counties statewide and the outer rings of major metro areas. Eligibility depends on the specific property address and your household income relative to the area median income limits.

If you are looking at a home in rural Texas or the edge of a metro, it is worth running the address through the USDA eligibility map. The savings from skipping a down payment, combined with reduced mortgage insurance, can be meaningful. I can help you check whether a specific property qualifies before you make an offer.

Jumbo Loans

Jumbo loans cover purchase amounts above the conforming loan limit, which in 2026 is $832,750 for most Texas counties. Jumbo loans have stricter qualification requirements, including stronger credit, more reserves, and thorough income documentation. They come into play for higher-priced homes in Austin, the Houston Memorial and Tanglewood areas, Dallas Park Cities, and similar luxury submarkets across the state.

Specialty and Alternative Documentation Programs

Beyond the five core programs, Texas borrowers have access to a wide range of specialty options. As a Fairway broker, I work with bank statement loans for self-employed borrowers, 1099 income loans for contractors, DSCR loans for real estate investors, asset-only programs for borrowers who qualify on assets rather than income, renovation and construction loans for new builds, and reverse mortgages for homeowners 62 and older. If your situation does not fit a standard W-2, conventional box, there is almost always a program that works. The key is matching the loan to your situation.

Down Payment Strategies for Texas Buyers

How much should you put down? It is one of the most common questions I get, and the answer depends on your specific situation. Here is the spectrum.

At the low end, VA and USDA loans allow zero down payment for eligible buyers. FHA and some conventional programs allow as little as 3 to 3.5 percent down. These options open homeownership to buyers who have steady income but limited savings.

In the middle range, 5 and 10 percent down balances accessibility against reduced PMI costs and a stronger offer position. Many Texas move-up buyers land here, using equity from their previous home plus savings to fund the down payment while keeping reserves for moving costs and unexpected expenses.

At 20 percent down, you eliminate PMI entirely and present the strongest possible offer to sellers. This works well for buyers with significant equity from a prior sale or substantial savings.

The right down payment is not just about what you can afford. It is about balancing monthly payment, reserves, and broader financial goals. Stretching to put 20 percent down can eliminate PMI but leave you without a safety net. Putting less down preserves cash but increases the monthly payment. I model these scenarios with you before you commit.

Texas Down Payment Assistance Programs

Texas runs several down payment assistance programs that can bridge the gap between your savings and your goal. The Texas State Affordable Housing Corporation (TSAHC) offers programs like Home Sweet Texas Home and Homes for Texas Heroes, which serve teachers, peace officers, EMTs, firefighters, veterans, and corrections officers. The Texas Department of Housing and Community Affairs (TDHCA) administers My First Texas Home and My Choice Texas Home, which provide grants or low-interest second loans to help cover down payment and closing costs.

Many local cities and counties run their own programs as well. Houston, Dallas, Austin, San Antonio, and Fort Worth all have municipal DPA options for buyers who meet income and purchase price guidelines. I can help you identify which programs you qualify for and how to layer them with your loan.

Gift funds from family are another option. Most loan programs allow relatives to contribute toward your down payment, with specific documentation requirements. I walk you through the rules and the paperwork.

The Texas Home Buying Process Step by Step

Knowing what to expect helps lower the stress and keeps your file moving. Here is how a typical Texas home purchase unfolds.

Initial consultation. We start with a conversation about your goals, timeline, income, debts, and savings. This is collaborative, not an interrogation. The point is to understand your situation and identify the loan options that fit.

Pre-approval. You provide documentation, pay stubs, tax returns, bank statements, and underwriting reviews your file. The result is a pre-approval letter that signals to sellers that you are a qualified, serious buyer. In a competitive Texas market, a strong pre-approval can be the difference between winning and losing a home.

Home search. With pre-approval in hand, you work with your real estate agent to find the right property. Your agent knows the neighborhoods, I know the financing. We coordinate so you focus on homes that fit both your lifestyle and your budget.

Making an offer. When you find the right home, your agent helps you structure the offer. Your pre-approval and down payment strength shape how competitive that offer reads to a seller. I provide supporting documentation and stay reachable to answer financing questions during negotiation.

Under contract. Once your offer is accepted, the detailed work begins. We order the appraisal, finalize loan documents, and clear any conditions underwriting raises. I keep you updated all the way so nothing surprises you.

Closing. You sign documents, funds transfer, and you receive your keys. Texas closings are handled at a title company. I attend or stay on call so we can resolve anything that comes up at the table.

What Makes Texas Home Loans Different

A few things about Texas mortgage lending are worth flagging upfront, because they can catch out-of-state buyers off guard.

Higher property taxes. Texas has no state income tax, but property taxes are above the national average. That changes the math when you compare a Texas monthly payment to one in California, Oregon, or Washington. Your mortgage payment includes principal, interest, taxes, and insurance, and the tax line in Texas is bigger than what many out-of-state buyers expect.

Texas Section 50(a)(6) cash-out rules. Texas has its own rules for home equity and cash-out refinances under the Texas Constitution. Among them: a maximum 80 percent loan-to-value, a 12-day cooling-off period, and specific disclosure requirements. If you are tapping equity in Texas, your timeline and paperwork are different from other states. This is worth knowing before you start.

Title insurance and closing costs. Texas closings happen at title companies, and Texas title insurance rates are set by the state, which gives buyers some predictability. Your closing cost worksheet still has variables, but a few key lines are uniform across lenders.

Homestead exemption. Once you own a Texas home as your primary residence, you can apply for a homestead exemption that reduces the taxable value of your home. This is a separate filing with your county appraisal district, and it is worth doing early. Some counties auto-renew the exemption, others require periodic re-application.

Why Work with a Texas-Based Branch Manager

There is a difference between a national call-center loan officer and a Texas-based broker who knows the state. I am based in Houston with Fairway Independent Mortgage Corporation, and I work with buyers across the state, from Houston to Dallas-Fort Worth to Austin to San Antonio and the smaller markets in between. I am also licensed in Indiana, Florida, and Tennessee, which makes relocation files smoother when buyers are moving to or from Texas.

As a broker, I have access to a wide range of investors and loan programs, which means I can match the right product to the right borrower instead of pushing one bank’s product menu. With over 20 years in lending and hundreds of five-star reviews across Google, Fairway, Experience.com, and Yelp, my approach is education-first, communication-heavy, and built around closing on the date you committed to.

Frequently Asked Questions About Texas Home Loans