Here’s How to Buy a Home in Texas With an FHA Loan

Last updated: October 2025

Quick Answer

To buy a home in Texas with an FHA loan, you’ll need a minimum credit score of 580, a down payment as low as 3.5%, and a steady income. FHA loans are ideal for first-time homebuyers and those rebuilding credit.

Salute Mortgage can help Texas buyers qualify with personalized guidance, even if you’re starting with a lower score.

Apply for an FHA loan with Salute Mortgage.

What is an FHA loan?

An FHA loan is a mortgage backed by the Federal Housing Administration, designed to help buyers with limited savings or lower credit. It’s one of the most accessible home loan options available in Texas.

FHA loans are especially helpful in the Texas housing market because:

• Many areas offer affordable home prices under FHA loan limits
• First-time buyers can qualify with less money down
• Credit scores starting at 580 may still be approved
• FHA loans allow higher debt-to-income (DTI) ratios
• Sellers can help cover closing costs

Whether you’re buying in Houston, San Antonio, Dallas, or a rural town, FHA loans provide flexibility in both price and qualification.

FHA loan requirements in Texas

While FHA loans are federally insured, they’re issued by approved lenders like Salute Mortgage. That means you must meet both FHA guidelines and lender-specific criteria.

Here’s what you’ll typically need to qualify:

• Minimum credit score of 580 for a 3.5% down payment
• A credit score between 500–579 requires 10% down
• Proof of steady employment and income for 2 years
• Debt-to-income ratio (DTI) typically under 43%
• Property must be your primary residence
• Property must pass an FHA appraisal and meet livability standards

Salute Mortgage helps buyers prepare documentation, clean up credit reports, and calculate borrowing power based on local Texas housing prices.

How much house can you buy with an FHA loan in Texas?

Texas FHA loan limits vary by county and are adjusted annually based on local housing prices.

2025 FHA loan limits for most Texas counties:

• 1-unit home: $524,225
• 2-unit home: $671,200
• 3-unit home: $811,275
• 4-unit home: $1,008,300

High-cost counties like Travis (Austin) or Collin (north of Dallas) may have higher limits. Salute Mortgage uses the exact county limit based on your target location to ensure your loan amount qualifies under FHA rules.

FHA down payment and mortgage insurance

FHA loans are known for low down payments. If your credit score is at least 580, you can qualify with just 3.5% down. That means on a $300,000 home, your down payment would be $10,500.

However, FHA loans also require mortgage insurance premiums (MIP), which protect the lender in the event of default.

This includes:

• Upfront MIP: 1.75% of the loan amount, usually rolled into the loan
• Annual MIP: Paid monthly and varies by loan term and down payment

MIP cannot be removed unless you refinance into a conventional loan later. Salute Mortgage can help you build a long-term plan to do just that.

Can you buy with lower credit in Texas?

Yes. FHA loans are specifically designed to benefit borrowers with lower credit scores. Even if your credit is below 600, you may still qualify with the right income, low debt, and stable housing history.

What helps offset a lower score:

• Paying rent on time for 12 months
• Minimal credit card balances
• No recent bankruptcies or collections
• Using a co-borrower with stronger credit

Salute Mortgage offers free credit reviews and can help you determine which steps to take before applying. Many Texas buyers go from “not ready” to “fully approved” in under 90 days.

FHA home appraisal requirements in Texas

Before your loan is approved, the home must pass an FHA appraisal. This ensures the home is:

• Safe
• Structurally sound
• Free of major hazards
• Meets HUD’s livability standards

In Texas, older homes—especially in rural areas or military towns—may need repairs before they qualify. Your real estate agent and Salute loan officer can help you identify issues early and negotiate repairs with the seller when needed.

Why FHA loans are popular with Texas first-time buyers

Texas is home to many first-time buyers, especially military families, recent college graduates, and young professionals.

FHA loans support these buyers with:

• Lower upfront costs
• Fewer credit barriers
• Option to use down payment assistance programs
• Flexible underwriting with income from roommates or family
• Government-backed protections during hardship

Salute Mortgage specializes in helping Texas buyers align loan approval with realistic housing goals, even in competitive markets.

Getting pre-approved for an FHA loan in Texas

The best way to start your homebuying journey is with a full FHA loan pre-approval. This shows sellers you’re serious and lets your real estate agent focus on homes you can afford.

Salute Mortgage issues FHA pre-approvals based on:

• Verified income and assets
• Full credit review
• County-based loan limit calculations
• Location-specific MIP and tax estimates
• Your long-term housing goals

Take the first step toward Texas homeownership

Using your FHA loan to buy a home in Texas is possible, even with less-than-perfect credit. With low down payments, flexible income requirements, and expert help from Salute Mortgage, you can get approved, make a strong offer, and start building long-term equity.

Whether you’re in Austin, El Paso, Fort Worth, or a small Texas town, FHA financing opens doors. Salute Mortgage can help you walk through them with clarity and confidence.

Get your FHA loan quote and start your Texas home search today.