Saving a 20% down payment or building a spotless credit profile while Texas home prices and rents climb can make buying your first house feel out of reach.
This guide breaks down the complete 2026 Texas FHA loan requirements—from credit score tiers, mortgage insurance costs, and debt-to-income rules to county loan limits and state down payment assistance.
Check Your Texas FHA Loan Eligibility
By the end, you will know exactly what it takes to qualify for an FHA loan in Texas and how to prepare your application before you start touring homes.
FHA Credit Score and Down Payment Tiers in Texas (2026)
Under HUD Handbook 4000.1 (Update 18, issued August 12, 2026), your credit score determines both your eligibility and your minimum down payment—officially called your Minimum Required Investment (MRI).
| Minimum Decision Credit Score (MDCS) | Maximum LTV | Minimum Down Payment (MRI) |
|---|---|---|
| 580 or higher | 96.5% of Adjusted Value | 3.5% |
| 500 to 579 | 90.0% of Adjusted Value | 10.0% |
| Below 500 | Ineligible | Not eligible for FHA financing |
| No credit score (insufficient / non-traditional credit) | Up to 96.5% of Adjusted Value | 3.5% (requires manual underwriting) |
How FHA Calculates Your Qualifying Score
Lenders do not average your credit scores. Instead, HUD rules use your Minimum Decision Credit Score (MDCS):
- If three credit bureau scores are pulled, your MDCS is the middle (median) score.
- If two scores are pulled, your MDCS is the lower of the two.
- If only one score is available, that single score is your MDCS.
- When two or more people apply on the same loan, the lender must use the lowest MDCS among all borrowers.
If you have no credit score at all because you do not use traditional credit cards or loans, HUD still allows maximum financing (up to 96.5% LTV), provided your file is manually underwritten using non-traditional credit history.
Who Can Fund Your Down Payment and Special LTV Caps
Under Section 203(b)(9) of the National Housing Act, the homebuyer must put in a Minimum Required Investment of at least 3.5% of the Adjusted Value. That 3.5% can come from your own savings, an eligible gift, or an approved down payment assistance program—but it cannot come from the seller, anyone who benefits financially from the transaction, or anyone reimbursed by those parties.
A few special purchase structures carry lower maximum loan-to-value (LTV) limits under HUD Handbook 4000.1:
- Non-occupying co-borrowers: Maximum LTV is capped at 75%, unless the borrowers are family members, in which case LTV can reach 96.5% (as long as the property is a 1-unit home and the family member is not selling to the non-occupying co-borrower).
- Identity-of-interest and tenant/landlord purchases: Maximum LTV is capped at 85%, with exceptions for family-member purchases and tenants who have rented the home for 6 months or more.
The maximum mortgage term for a Texas FHA purchase loan is 30 years.
FHA Mortgage Insurance Premiums (MIP) in 2026
Every Texas home loan insured by the Federal Housing Administration requires Mortgage Insurance Premiums (MIP) to protect the program against losses. You will pay two types of MIP under HUD Handbook 4000.1 Appendix 1.0:
- Upfront MIP (UFMIP): Equal to 1.75% (175 basis points) of the base loan amount on purchase mortgages. The UFMIP may be financed into the loan, and if it is financed, the entire amount must be financed. UFMIP is not refundable except when refinancing into a new FHA loan.
- Annual MIP: Calculated as a percentage of your base loan amount and divided into 12 monthly installments inside your mortgage payment. The rate and duration depend on your loan term, base loan amount, and initial loan-to-value ratio.
Annual MIP for Loan Terms Over 15 Years (Most 30-Year Mortgages)
| Base Loan Amount | Loan-to-Value (LTV) | Annual MIP Rate | MIP Duration |
|---|---|---|---|
| At or below $726,200 | 90.00% or less (10%+ down) | 0.50% (50 bps) | 11 years |
| At or below $726,200 | Over 90.00% to 95.00% | 0.50% (50 bps) | Full mortgage term |
| At or below $726,200 | Over 95.00% (includes 3.5% down) | 0.55% (55 bps) | Full mortgage term |
| Above $726,200 | 90.00% or less (10%+ down) | 0.70% (70 bps) | 11 years |
| Above $726,200 | Over 90.00% to 95.00% | 0.70% (70 bps) | Full mortgage term |
| Above $726,200 | Over 95.00% | 0.75% (75 bps) | Full mortgage term |
Annual MIP for Loan Terms of 15 Years or Less
| Base Loan Amount | Loan-to-Value (LTV) | Annual MIP Rate | MIP Duration |
|---|---|---|---|
| At or below $726,200 | 90.00% or less | 0.15% (15 bps) | 11 years |
| At or below $726,200 | Over 90.00% | 0.40% (40 bps) | Full mortgage term |
| Above $726,200 | 78.00% or less | 0.15% (15 bps) | 11 years |
| Above $726,200 | Over 78.00% to 90.00% | 0.40% (40 bps) | 11 years |
| Above $726,200 | Over 90.00% | 0.65% (65 bps) | Full mortgage term |
How this looks in practice: A Texas buyer using a standard 30-year FHA loan with 3.5% down (96.5% LTV) on a base loan at or below $726,200 pays 1.75% UFMIP plus 0.55% annual MIP for the life of the loan. If you put at least 10% down (90% LTV or less), the annual MIP stays on the loan for 11 years instead of the full term.
Check Your Texas FHA Loan Eligibility
FHA Debt-to-Income (DTI) Ratio Rules
Your debt-to-income (DTI) ratio compares your gross monthly income to two numbers: your proposed monthly housing payment (front-end or housing ratio, which includes principal, interest, Texas property taxes, homeowners insurance, MIP, and any HOA dues) and your total monthly debt obligations (back-end or total ratio, which adds car loans, student loans, credit cards, and installment debts).
How FHA evaluates your DTI depends on whether your loan is approved through automated underwriting or manual underwriting:
- Automated Underwriting (FHA TOTAL Scorecard): Most FHA applications run through the TOTAL Scorecard. When TOTAL returns an "Accept" finding, that automated approval sets the acceptable DTI terms; HUD Handbook 4000.1 does not publish a fixed numeric DTI cap for Accept files.
- Manual Underwriting: If your credit profile has certain derogatory events, if you have no credit score, or if TOTAL returns a "Refer" finding, the lender must manually underwrite the file using HUD's strict DTI matrix below.
FHA Manual Underwriting DTI Matrix
Per HUD Handbook 4000.1 (II.A.5.d.viii), manually underwritten FHA loans must meet the following maximum housing and total debt ratios based on the lowest MDCS on the application:
| Lowest MDCS | Max Ratios (Housing / Total DTI) | Compensating Factors Required |
|---|---|---|
| 500–579, or no credit score | 31% / 43% (33% / 45% for Energy Efficient Homes) | Not applicable; borrowers in this tier may not exceed 31% / 43% |
| 580 or higher | 31% / 43% (33% / 45% for Energy Efficient Homes) | None required |
| 580 or higher | 37% / 47% | One compensating factor: verified cash reserves, minimal increase in housing payment, or residual income |
| 580 or higher | 40% / 40% | No discretionary debt |
| 580 or higher | 40% / 50% | Two compensating factors from: verified cash reserves, minimal housing payment increase, significant additional income not counted in Effective Income, or residual income |
Employment, Income, and Residency Requirements
Your lender documents your Effective Income to calculate the debt-to-income ratios above. If you add state down payment assistance, those programs set their own income limits; see Texas Homebuyer Income & Purchase Price Limits.
To see how FHA documentation fits into the broader homebuying process, review our complete guide to the Requirements to Buy a House in Texas.
Residency and Citizenship Rules
Under HUD Handbook 4000.1 (II.A.1.b.ii(A)(8)-(9)), U.S. citizenship is not required to get an FHA loan. However, HUD's listed eligible non-citizen categories are limited to lawful permanent residents and citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. Non-permanent residents are not listed as eligible in the handbook. Buyers who are non-U.S. citizens living outside those categories can explore Foreign National Loans in Texas as an alternative path.
Waiting Periods After Bankruptcy, Foreclosure, or Short Sale
Past financial hardship does not permanently lock you out of an FHA loan. HUD Handbook 4000.1 sets specific waiting periods—measured from the discharge or title transfer date to the date your FHA case number is assigned.
Note that a foreclosure, deed-in-lieu of foreclosure, or short sale within 3 years of case number assignment automatically forces an automated TOTAL Scorecard file to downgrade to a "Refer" for manual underwriting.
| Credit Event | Standard Waiting Period (to Case Number Assignment) | Documented Exception Rules |
|---|---|---|
| Chapter 7 Bankruptcy | 2 years from discharge date, with re-established good credit or chosen not to incur new credit | 12 to 24 months from discharge if caused by documented extenuating circumstances beyond the borrower's control |
| Chapter 13 Bankruptcy | At least 12 months of the payout period have elapsed with satisfactory on-time payments and written permission from the bankruptcy court | None stated in the handbook |
| Foreclosure or Deed-in-Lieu | 3 years from the date title transferred from the borrower | Shorter wait possible for documented extenuating circumstances (such as serious illness or death of a wage earner; divorce and job relocation do not qualify) |
| Short Sale (Pre-Foreclosure Sale) | 3 years from the date title transferred | Eligible sooner if all mortgage and installment payments were made within the month due for the 12 months prior to the short sale; extenuating-circumstance exception also available |
Check Your Texas FHA Loan Eligibility
Gift Funds and the 6% Seller Concession Limit
Many Texas buyers reduce their out-of-pocket cash at closing by combining family gift funds with seller-paid closing costs. HUD allows both, provided you follow the documentation rules in Handbook 4000.1.
FHA Gift Fund Rules
Gift funds may cover part or all of your 3.5% Minimum Required Investment, as long as the gift also meets the MRI source rules above, and the gift must not require repayment.
- Acceptable gift donors: A family member; your employer or labor union; a close friend with a clearly defined and documented interest in you; a charitable organization; or a governmental agency or public entity that provides homeownership assistance to low- or moderate-income families or first-time buyers.
- Unacceptable sources: Cash on hand is not an acceptable source of donor gift funds, and gifts covering your 3.5% MRI cannot come from the seller or anyone who financially benefits from the sale.
- Required gift letter: Both the donor and borrower must sign and date a gift letter stating the donor's name, address, phone number, relationship to the borrower, the exact dollar amount, and an explicit statement that no repayment is required. The transfer of funds must also be documented.
The 6% Seller Concession Rule
Interested parties—including the property seller, builder, real estate agent, or lender—may contribute up to 6% of the sales price toward origination fees, other closing costs, prepaid items, and discount points.
- What counts inside the 6% cap: Origination fees, other closing costs, prepaid items, discount points, interest-rate buydowns, mortgage-interest payments, mortgage payment protection insurance, and payment of the 1.75% UFMIP.
- What happens above 6%: Any interested-party contribution exceeding 6% of the sales price is treated by HUD as an inducement to purchase.
Property, Occupancy, and Appraisal Requirements
FHA loans are strictly for owner-occupied primary residences—not vacation homes or pure rental investments. (If you are buying an investment property in Texas, look into Texas DSCR Loans instead.)
Occupancy and Anti-Flipping Rules
- Move-in timeline: At least one borrower on the mortgage must occupy the property within 60 days of signing the security instrument and intend to live there as their principal residence for at least one year. FHA generally insures only one principal residence per borrower.
- Property flipping rule: A property is ineligible for FHA financing if the resale contract is signed 90 or fewer days after the seller acquired the property. For resales occurring between 91 and 180 days after the seller's acquisition at a price 100% or more above what the seller paid, the lender must obtain a second independent appraisal, and the buyer cannot be charged for that second appraisal.
Eligible and Ineligible Property Types
Under HUD Handbook 4000.1, FHA Single Family programs cover 1- to 4-unit owner-occupied principal residences:
- Eligible properties: Detached or semi-detached single-family houses, townhouses and row houses, manufactured housing meeting HUD guidelines, and units in FHA-approved condominium projects (or approved via Texas Condo Loans guidelines).
- Accessory Dwelling Units (ADUs): A one-unit home with one ADU is still treated as a one-unit property by FHA.
- Mixed-use properties: Allowed as long as at least 51% of the building's square footage is residential.
- 3- to 4-unit self-sufficiency test: If you buy a triplex or fourplex (living in one unit and renting the others), the property must pass FHA's self-sufficiency test: your total monthly PITI payment divided by the appraiser's net self-sufficiency rental income (fair market rent across all units minus the greater of the appraiser's vacancy/maintenance estimate or 25%) cannot exceed 100%.
- Ineligible properties: Vacation homes, commercial enterprises, boarding houses, hotels/motels/condotels, bed-and-breakfasts, fraternity/sorority houses, other transient housing, and any property that will remain encumbered by a PACE (Property Assessed Clean Energy) obligation.
FHA Appraisal and Minimum Property Standards Overview
Your lender reviews the FHA appraisal to confirm the home is adequate collateral and meets HUD's Property Acceptability Criteria.
- Minimum Property Requirements (MPR): Apply to all FHA homes and require that the property be safe, sound, and secure.
- Minimum Property Standards (MPS): Regulatory construction standards that apply to New Construction properties.
- Repairs and validity: The appraiser notes every repair needed to meet HUD's criteria, with a cost to cure. FHA appraisals remain valid for 180 days from the effective date (and can be extended to one year with an appraisal update).
If a Texas home you want to buy needs repairs or remodeling to pass MPR—or you simply want to finance upgrades into your purchase—an FHA 203(k) loan in Texas lets you bundle the purchase and renovation into a single FHA mortgage (up to $75,000 in nonstructural work on a Limited 203(k), or larger structural projects on a Standard 203(k)).
2026 Texas FHA Loan Limits Summary
Each calendar year, HUD sets maximum FHA loan amounts by county. For case numbers assigned on or after January 1, 2026 (under Mortgagee Letter 2025-23), 229 of Texas's 254 counties use the national floor of $541,287 for a 1-unit home—including all of the Houston-Pasadena-The Woodlands metro (Harris, Fort Bend, Montgomery, Brazoria, and Galveston counties).
Twenty-five Texas counties sit above the floor in 2026:
| Texas Area / Metro (CY2026) | 1-Unit Limit | 2-Unit Limit | 3-Unit Limit | 4-Unit Limit |
|---|---|---|---|---|
| Standard Texas Floor (229 counties, including Houston MSA, El Paso, Hidalgo, Lubbock) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| San Antonio-New Braunfels MSA (Atascosa, Bandera, Bexar, Comal, Guadalupe, Kendall, Medina, Wilson) | $557,750 | $714,000 | $863,100 | $1,072,600 |
| Dallas-Fort Worth-Arlington MSA (Collin, Dallas, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant, Wise) | $563,500 | $721,400 | $872,000 | $1,083,650 |
| Austin-Round Rock-San Marcos MSA (Bastrop, Caldwell, Hays, Travis, Williamson) | $571,550 | $731,700 | $884,450 | $1,099,150 |
| Glasscock County (Non-metro, see note) | $813,050 | $1,040,850 | $1,258,150 | $1,563,600 |
Note: Glasscock County's figures are what HUD's lookup tool returns; they are unusually high for a non-metro county, so confirm them with your lender before relying on them.
These are the current published 2026 HUD figures; limits change annually, so confirm your county's active limit with your lender. For a full county-by-county lookup, see our guide to Texas FHA Loan Limits by County (2026). If you are shopping at higher price points, compare these numbers against the 2026 baseline $832,750 limit in our Texas Conforming Loan Limits by County (2026) guide.
Check Your Texas FHA Loan Eligibility
Pairing a Texas FHA Loan with State Down Payment Assistance (TDHCA & TSAHC)
An FHA loan in Texas can be paired with state-level down payment assistance (DPA). Because HUD accepts gifts from governmental agencies with homeownership programs as an eligible source for your 3.5% Minimum Required Investment, you can layer a state program onto a 30-year fixed FHA mortgage to cover your down payment and part of your closing costs.
The two statewide agencies are the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). While FHA itself allows credit scores down to 580 for 3.5% down, both TDHCA and TSAHC require a minimum credit score of 620 on FHA loans.
| Program & Agency | Target Buyers | FHA DPA Amount & Structure | Min Credit Score (FHA) | Manual Underwriting Max DTI |
|---|---|---|---|---|
| My First Texas Home (TDHCA) | First-time buyers (no primary residence in last 3 years), qualified veterans, or buyers in Targeted Areas | 2% to 5% of total loan amount as a 0% interest second lien (30-year deferred repayable, or 3-year deferred forgivable when paired in the MFTH + MCC Combo; subject to daily Rate Notice availability) | 620 | 45% (follows AUS findings for automated approvals) |
| My Choice Texas Home (TDHCA) | Repeat buyers, first-time buyers, and veterans (no first-time buyer or purchase price limit) | 2% to 5% of total loan amount as a 0% second lien (30-year deferred repayable or 3-year deferred forgivable) | 620 | 45% (follows AUS findings for automated approvals) |
| Homes for Texas Heroes (TSAHC) | Full-time public K-12 educators (including school nurses/counselors/librarians/aides), peace officers, firefighters, EMS, corrections/juvenile corrections officers, county jailers, public security officers, nursing/allied health faculty, and veterans | 2% to 5% of total loan amount as a Grant or 3-year deferred forgivable second lien (or 4%–5% Bond 30-year repayable second lien when available) | 620 (640 for manufactured homes or manual underwrite) | 45% (no max DTI set by TSAHC with AUS approval) |
| Home Sweet Texas Home Loan Program (TSAHC) | Low- and moderate-income Texas buyers of any profession (first-time buyer not required for Non-Bond DPA) | 2% to 5% of total loan amount as a Grant or 3-year deferred forgivable second lien (or 4%–5% Bond 30-year repayable second lien when available) | 620 (640 for manufactured homes or manual underwrite) | 45% (no max DTI set by TSAHC with AUS approval) |
Key Rules When Pairing FHA with TDHCA or TSAHC
- Interest rates and availability change daily: TDHCA and TSAHC set their program mortgage rates and available DPA tiers daily, so a participating lender can quote today's exact rate and structure.
- Income and purchase price limits apply: Eligibility depends on your county and whether you use Bond or Non-Bond options. Check your county's current published caps in our Texas Homebuyer Income & Purchase Price Limits guide, or compare city and county options across 58 Texas First-Time Home Buyer Grants & Programs (2026).
- Pre-purchase homebuyer education: Both TDHCA and TSAHC require borrowers to complete an approved homebuyer education course prior to closing.
- 203(k) restriction difference: TDHCA does not allow FHA 203(k) loans in any of its programs. TSAHC allows FHA Limited 203(k) loans alongside standard 30-year fixed FHA purchase loans.
- How to apply: Buyers apply for TDHCA and TSAHC programs through a participating lender approved by the agency. Our team helps you check your eligibility, compare standard FHA financing against state assistance programs, and get connected with the right path for your budget.
(Note: If you are an eligible veteran or active-duty service member, also compare an FHA loan against VA Loans in Texas, or if you are buying in a qualifying rural community, check USDA Loans in Texas (2026), as both offer 0% down payment options without FHA mortgage insurance.)
Next Steps: Check Your Texas FHA Eligibility
Whether you are qualifying with a 580 credit score and 3.5% down from your own savings or pairing a 620+ score with Texas down payment assistance, knowing where your credit, DTI, and county loan limit stand is the fastest way to shop with confidence. Take two minutes to review your numbers and see which FHA options fit your goals in 2026.
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