FHA home loans in Texas with as little as 3.5% down
Government-insured home loans built for first-time buyers, tighter budgets, and credit that is still a work in progress. We shop a panel of lenders to find the one whose rules fit you.
Free, no obligation · or call 512-588-2771
Think you are not ready to buy a home?
Most people who ask us about FHA are sure something is standing in the way. Usually, it is one of these four.
FHA is not a loophole or a last resort. It is a mainstream, government-insured program that helps buyers across Texas every year.
From first call to keys, in four steps
Tell us your situation
A 30-minute call or a short online application: income, savings, credit, and the kind of home you want.
Get a real plan
We compare FHA with your other options, explain the costs in plain English, and tell you if anything is worth fixing first.
Get pre-approved
With your documents in hand, we issue a pre-approval letter you can use to make offers with confidence.
Close and get your keys
We manage the file through appraisal, underwriting and closing, and keep you updated at every stage.
Why FHA works for real life
A low down payment
As little as 3.5% down with a 580 credit score. Less cash up front means you can buy sooner.
Gift funds welcome
Family can gift part or all of your down payment, with the right documentation.
Credit-friendly guidelines
FHA accepts lower scores than many conventional loans, and a thin credit file does not automatically rule you out.
More room on debt
Automated underwriting can approve debt-to-income ratios well above the manual benchmark when the rest of your file is strong.
An easy refinance later
The FHA Streamline refinance lets you lower your rate down the road with reduced paperwork.
Stacks with assistance
Pair FHA with Texas down payment assistance to cut your cash to close even further.
Not sure FHA is your best fit?
We will compare FHA to conventional and down payment assistance using your numbers, and tell you which costs less over time.
FHA loan requirements in Texas (2026)
FHA loans are insured by the Federal Housing Administration, which lets approved lenders say yes to borrowers who might not fit conventional rules. The home must be your primary residence, and it has to meet HUD’s minimum property standards at appraisal.
- Credit score: 580 or higher for 3.5% down. A score of 500–579 requires 10% down.
- Down payment: 3.5% of the purchase price, and gift funds are allowed.
- Debt-to-income: HUD’s manual benchmark is 31% for housing and 43% for total debt, and automated underwriting can approve higher when your file has strengths.
- Occupancy: primary residence only, not a rental or second home.
- Lender rules: many lenders add their own minimum score, often 600–620. We shop lenders whose rules fit your file.
FHA credit score and down payment, by tier
HUD sets three credit tiers. The line that matters most is 580.
| Credit score | Minimum down payment | What it means |
|---|---|---|
| 580 and above | 3.5% | Maximum financing available |
| 500–579 | 10% | Eligible, with a higher down payment |
| Below 500 | Not available | Not eligible for FHA insurance |
These are HUD’s published federal minimums, not a promise of approval. Individual lenders often set higher minimums.
FHA mortgage insurance, in plain English
Every FHA loan carries mortgage insurance, and it is the main trade-off for the low down payment. There are two parts: an upfront premium of 1.75% of the loan amount, which most buyers finance into the loan, and an annual premium collected monthly. On a typical 30-year loan, the annual premium is 0.55% with 3.5% down, or 0.50% with 5% or more down.
Unlike private mortgage insurance on a conventional loan, FHA insurance does not cancel automatically at 20% equity. Many borrowers remove it later by refinancing into a conventional loan once they have built equity, and that is exactly the kind of long-term plan we map out with you up front. See the full schedule in our FHA mortgage insurance (MIP) explained guide.
Want to know what you would actually pay?
A quick call gets you a straight answer on payment, cash to close, and whether FHA is the cheapest route for you.
FHA vs. conventional: which one fits you?
Both can be the right answer. Here is how they usually compare, and you can read the full breakdown in our FHA vs. conventional loans guide.
| FHA | Conventional | |
|---|---|---|
| Minimum down | 3.5% (580+ credit) | As low as 3% |
| Credit | Lower scores accepted | Most lenders look for about 620 |
| Mortgage insurance | Upfront plus annual, often for the life of the loan | PMI that cancels at 78–80% loan-to-value |
| Occupancy | Primary residence only | Primary, second home or investment |
| Often best when | Credit is lower or cash is tight | Credit is strong and income is steady |
We run both on your numbers, so you see the real monthly payment and cash to close side by side.
Pair FHA with down payment assistance
FHA’s low down payment stacks well with Texas programs that cover part of your down payment or closing costs. Depending on your income and the program, assistance can come as a grant or a deferred second lien. We check every program you may qualify for before you apply, so you do not leave money on the table.
Read how it works in our guide to down payment assistance in Texas.
The FHA Streamline: a refinance you will thank yourself for later
One underrated FHA benefit comes after closing. The FHA Streamline refinance lets current FHA borrowers lower their interest rate with reduced paperwork, so a rate drop does not mean starting from scratch.
When you are ready to look at lowering your payment, our refinance specialists can tell you if it is worth the closing costs.
Meet your FHA loan officer
Matthew MontsDeOca is an independent mortgage broker based in Austin — Texas’s state capital — licensed to help buyers across the entire state, from Houston and San Antonio to Dallas-Fort Worth and everywhere between. Because Wise Capital shops a panel of lenders instead of selling one bank’s products, you get advice on which program actually fits, including when FHA is not the right answer.
FHA loan questions, answered
What credit score do I need for an FHA loan?
How much do I need to put down?
Does FHA require mortgage insurance?
Can I use an FHA loan for a second home or rental?
Can I get an FHA loan with no credit score?
Is FHA better than conventional?
How long does it take to close an FHA loan?
Book a free 30-minute call
Not ready to apply? Talk it through first. We will look at your credit, savings and budget and tell you honestly whether FHA is your best move.
- 30 minutes, by video (Google Meet) or phone
- Free, with no obligation to apply
- A clear next step, whether that is applying now or fixing one thing first
- You talk to a licensed loan officer, not a call center
Pick a time that works for you
Choose a slot on the calendar and you will get a confirmation by email. No obligation, no pressure.
Prefer to talk now? Call 512-588-2771 · open the calendar in a new tab.
Your first home could be closer than you think.
Check your FHA options in a few minutes, or book a quick call and we will walk you through it.
Or call 512-588-2771 · Free, no obligation
More FHA help, in plain English
Other loan programs
FHA loans are insured by the Federal Housing Administration. Wise Capital Mortgage is not affiliated with, endorsed by, or acting on behalf of HUD, the FHA or any government agency.
*Minimum 3.5% down payment requires a credit score of 580 or higher and a primary residence; scores of 500–579 require 10% down. FHA loans require upfront and annual mortgage insurance premiums. Additional lender requirements, property standards and loan limits apply. Interest rates and APR depend on your credit profile, loan amount and market conditions. Ask us for a personalized Loan Estimate.
Wise Capital Mortgage, LLC · 5900 Balcones Drive #23333, Austin, TX 78731 · NMLS #2092335 · Equal Housing Lender. Matthew MontsDeOca, NMLS #1034513. This page is for general information and is not a commitment to lend or an offer of credit. Loan programs, eligibility, terms and rates are subject to change and to underwriting approval. You can verify our licensing at the NMLS Consumer Access website, nmlsconsumeraccess.org.