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FHA Loans in Texas

Living in the Lone Star State is a great choice when it comes to purchasing a home. Many first-time homebuyers are turning to FHA loans in Texas to save some big money, and time, on their mortgage.

An FHA loan is great for those not wanting to put down a large down payment and those who have less-than-perfect credit scores. Continue reading to see how a Texas FHA loan could be the right option for you.

Why Choose an FHA Loan in Texas?

Texas has got a lot of people living in it, over 27 million people to be exact. That means a lot of people are purchasing homes, and a lot of people are overwhelmed when it comes to choosing a mortgage. An FHA loan in Texas is one option many residents are choosing, and as of April 2019, the total value of FHA loans in the state of Texas was over $1.4 billion!

Benefits of choosing an FHA Loan

  • FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
  • FHA mortgage rates are typically lower than conventional mortgage rates.
  • FHA down payment and credit score requirements are typically lower than conventional loans
  • Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
  • FHA loans are assumable

FHA Loan Limits in Texas

The maximum Texas FHA loan limit varies from location to location, to account for higher cost of real estate, and is adjusted yearly. The baseline limit in Texas is $498,257, but is going to be higher in areas such as Houston and Austin. Check the link below for a full list of FHA loan limits in Texas for 2024.

Are You Eligible for an FHA Loan in TX?

You may be eligible for an FHA loan, if you:

  • Have 2 years of steady employment, preferably with the same employer.
  • Have had steady income (or increasing income) in the past two years.
  • Have had less than two 30-day periods of late payments on your credit report.
  • Have declared bankruptcy no less than two years ago and have maintained good credit since.
  • Have not been a party in a foreclosure for at least three years and have maintained good credit since.
  • Anticipate your mortgage payment will be equal to or less than 30% of your gross income.

What Do You Need to Apply for an FHA Loan in TX?

Buyers must be able to provide the following information and documents as requested by lenders:

  • The addresses of all your residences over the past two years.
  • The names of your employers over the past two years.
  • W2's for the past two years and current paycheck stubs.
  • Your current gross monthly salary.
  • Your Social Security Number.
  • Names, addresses, and account numbers with balances on all checking and savings accounts.
  • Addresses and loan information of any other real estate you owned.
  • Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
  • Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.

Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.