Mortgage in Texas 2026: Requirements, Rates and First-Time Buyer Help

Getting a mortgage in Texas in 2026 is a different experience from buying in most other states. Texas has no state income tax, some of the highest property taxes in the country, two separate state housing agencies offering down payment help, and a housing market where the median home sold for about $339,000 in July 2026, according to the Texas Real Estate Research Center. Mortgage rates have stayed above 7 percent for much of the year, with Freddie Mac’s weekly survey putting the 30-year fixed average at 7.32 percent in late October 2026. That combination means a Texas buyer needs to plan carefully: the loan itself is only part of the cost. This guide covers the requirements, the 2026 loan limits, current rates, and the first-time buyer programs worth knowing about in Texas.

Mortgage in Texas at a Glance in 2026

The Texas median home price was about $339,000 in mid-2026, roughly flat compared with a year earlier. The 30-year fixed mortgage rate sat around 7.3 percent in late October 2026, so a buyer borrowing $300,000 at that rate pays roughly $2,060 a month in principal and interest alone, before taxes and insurance. Texas property taxes are high, with an average effective rate of about 1.40 percent of home value, according to the Tax Foundation’s 2026 figures, which adds roughly $395 a month on a median-priced home. Texas runs two state housing agencies, TDHCA and TSAHC, that can cover up to 5 percent of your loan amount in down payment help.

Texas Mortgage Requirements in 2026

The basic requirements are the same as anywhere else in the United States, because the loan programs are national.

Credit Score

For a conventional loan, most lenders want a credit score of at least 620, and the best rates go to borrowers at 740 and above. An FHA loan can be approved with a score as low as 580 with 3.5 percent down, or 500 to 579 with 10 percent down. VA loans have no official minimum score, but most lenders look for 620 or above. If your score is below 620, your first step is improving your credit: paying down card balances and fixing errors on your credit report can move your score enough to change your rate.

Down Payment

A conventional loan can be done with as little as 3 percent down for first-time buyers, and FHA loans need 3.5 percent. On a $339,000 home, 3 percent is about $10,170. A 20 percent down payment, about $67,800 on the median home, avoids private mortgage insurance, but it is not required, and most first-time buyers do not put down that much.

Debt-to-Income Ratio

Lenders look at your debt-to-income ratio, or DTI: your total monthly debt payments divided by your gross monthly income. Most conventional loans cap DTI at around 45 percent, and FHA loans can go up to 50 percent or slightly higher. The TDHCA programs cap DTI at 50 percent.

Income, Employment and Documents

Lenders want to see stable income. You will need recent pay stubs, two years of tax returns, W-2s, and bank statements. Self-employed borrowers need extra documentation, usually two years of tax returns and a profit and loss statement.

Texas-Specific Rules

Texas has a few rules that surprise out-of-state buyers. The big one is the homestead protection in the Texas Constitution: your primary home gets strong protection from forced sale by most creditors, and you can claim a homestead exemption that lowers the taxable value of your home for property taxes, so file for it as soon as you move in. Texas also has strict rules on home equity loans and cash-out refinancing, including a limit that total home equity borrowing cannot exceed 80 percent of the home’s value.

2026 Loan Limits in Texas

Loan limits decide how much you can borrow with a conventional or FHA loan. The limits for 2026 rose again, and Texas is simple here: every county in Texas uses the baseline limit, because no Texas county qualifies as a high-cost area.

The conforming limit of $832,750 was set by the Federal Housing Finance Agency, up $26,250 from $806,500 in 2025, and it applies to loans originated on or after January 1, 2026. The FHA floor of $541,287 is 65 percent of that conforming limit, set by the Department of Housing and Urban Development. You can check the official figures on the FHFA conforming loan limit page and the HUD FHA loan limits lookup tool.

Mortgage Rates in Texas in 2026

There is no separate “Texas mortgage rate.” Texas borrowers get the same national rates as everyone else, adjusted for their credit score, down payment, and loan type. In late October 2026, Freddie Mac’s weekly survey put the average 30-year fixed rate at about 7.32 percent.

Your own rate will differ from the national average. A borrower with a 780 credit score and 20 percent down might be quoted well below the average, while a borrower with a 640 score and 3 percent down could be quoted well above it. On a $300,000 loan, a quarter point is roughly $50 a month and about $18,000 over 30 years, so getting three quotes is worth the effort. Our guide to mortgage rate shopping windows explains how to compare offers without hurting your credit score.

First-Time Buyer Programs in Texas

Texas has two separate state housing agencies, so you can choose the program that fits you best. Both offer down payment assistance of up to 5 percent of the loan amount, and both require you to work through an approved lender. You cannot apply directly to either agency.

TDHCA: My First Texas Home and My Choice Texas Home

The Texas Department of Housing and Community Affairs runs My First Texas Home, the state’s flagship first-time buyer program. It pairs a 30-year fixed-rate mortgage, available as an FHA, VA, or USDA loan, with down payment and closing cost help of up to 5 percent of the loan amount. The help comes as a 0 percent second lien, forgiven after three years if you stay put. To qualify, you must be a first-time buyer, meaning you have not owned and lived in a primary home in the past three years. That rule is waived for veterans and for homes in targeted census tracts. The minimum credit score is 620, the maximum debt-to-income ratio is 50 percent, and you must complete a homebuyer education course. Income and purchase price limits apply and vary by county.

My Choice Texas Home is the sibling program for buyers who are not first-time buyers. It offers the same up to 5 percent assistance, but the three-year rule does not apply, and it adds a conventional loan option through Fannie Mae’s HFA Preferred and Freddie Mac’s HFA Advantage programs.

TDHCA also offers a Mortgage Credit Certificate, or MCC, which turns part of your annual mortgage interest into a federal tax credit: 15 percent of the interest you pay each year, capped at $2,000 a year. The MCC can be used on its own or combined with a TDHCA loan, and it is available to first-time buyers under the same three-year rule.

TSAHC: Home Sweet Texas and Homes for Texas Heroes

The Texas State Affordable Housing Corporation runs two programs. Home Sweet Texas is open to income-eligible buyers statewide, and Homes for Texas Heroes is for teachers, police officers, firefighters, EMS personnel, corrections officers, and military veterans. Both offer down payment help of up to 5 percent of the loan amount, as a grant that never has to be repaid or as a forgivable second lien. TSAHC’s income limits were raised in July 2026, to 150 percent of area median family income for Home Sweet Texas and 170 percent for Homes for Texas Heroes. You must go through an approved lender. You can find the current program details on the TDHCA homebuyer programs page and the TSAHC programs page.

City Programs on Top

Several Texas cities add their own help on top of the state programs. Dallas offers up to $60,000 in assistance for qualifying buyers, Houston offers up to $50,000, and Austin offers up to $40,000. Ask your lender early whether a city program is available where you are buying; combining a city grant with a state loan can cover most of your down payment and closing costs.

Texas Property Taxes and the Homestead Exemption

Property taxes are the part of a Texas mortgage that catches new buyers off guard. Texas has no state income tax, so local governments and school districts rely heavily on property taxes. The average effective rate on owner-occupied homes is about 1.40 percent of home value, according to the Tax Foundation’s 2026 figures, compared with a national average under 1 percent. On a $339,000 home, that is roughly $4,750 a year, or about $395 a month, usually paid through your mortgage escrow account as part of your monthly payment.

The most important thing a new Texas homeowner can do is file for the homestead exemption as soon as they move in. The exemption lowers the taxable value of your primary home, which lowers your tax bill, and it also caps how much your home’s appraised value can rise each year for tax purposes. You file it with your county appraisal district, it costs nothing, and it only needs to be done once unless you move. Check the tax bill for the specific home before you make an offer.

How to Get a Mortgage in Texas, Step by Step

First, check your credit and fix any errors, then work out your budget, including property taxes and insurance, not just principal and interest. Our guide to what PITI is explains the four parts of your monthly payment. Next, get preapproved. Then find a home and make an offer. Once your offer is accepted, your lender orders an appraisal and title search, and your file goes through underwriting. During underwriting, do not open new credit cards, change jobs, or make large unexplained deposits. Finally, review your Closing Disclosure at least three days before closing. If you are using a TDHCA or TSAHC program, allow extra time for the program paperwork.

Mistakes Texas Buyers Should Avoid

The most common mistake is budgeting only for principal and interest and forgetting taxes and insurance, which in Texas can add $600 to $700 a month to your payment. The second is skipping the homestead exemption. The third is not comparing lenders: with rates above 7 percent, the gap between the best and worst quote is worth thousands. The fourth is buying without checking flood risk, because parts of Houston and the Gulf Coast flood, and flood insurance is not included in a standard homeowners policy. The fifth is waiving the inspection to win a bidding war.

A mortgage in Texas in 2026 is very doable, even with rates above 7 percent, as long as you go in with your eyes open. Know your credit score, know the loan limits, compare at least three lenders, and use the state’s help if you qualify for it. Using them can save you ten thousand dollars or more at the closing table. Start with preapproval, file your homestead exemption the day you move in, and budget for the full monthly payment, taxes included.

Frequently Asked Questions

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