Buying your first home in Texas can feel overwhelming, especially when it comes to understanding mortgage requirements. Fortunately, FHA loans remain one of the most accessible options for first-time buyers in 2025. Backed by the Federal Housing Administration, these loans offer flexible credit standards, low down payment options, and other benefits tailored to help buyers enter the housing market with confidence.
If you're wondering about FHA loan requirements in Texas and how to qualify, this guide will walk you through everything you need to know—step by step.
What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration. It was designed to make homeownership more attainable, especially for first-time buyers or those with less-than-perfect credit. These loans are issued by approved lenders and come with government backing, which reduces the lender's risk and increases the borrower’s chances of approval.
In Texas, FHA loans are popular because they require a lower down payment, accept lower credit scores, and allow for more flexible debt-to-income ratios compared to conventional loans.
Learn more about FHA loans in Texas at:
www.herringbank.com/mortgage/fha-loan/
Step-by-Step Guide to Qualifying for an FHA Loan in Texas
If you're a first-time buyer in Texas, here’s exactly how to qualify for an FHA loan in 2025.
To qualify for an FHA loan, you need a minimum credit score of 580 if you want to make a 3.5% down payment. If your score is between 500 and 579, you may still qualify, but you’ll need to make a 10% down payment.
Many lenders in Texas prefer a score of 620 or higher, but FHA guidelines are more flexible than conventional loan programs.
Your debt-to-income ratio compares your total monthly debts to your gross monthly income. FHA loans generally allow a DTI ratio up to 43%, although exceptions are made if other parts of your application are strong.
To calculate your DTI:
FHA loans require a minimum 3.5% down payment if your credit score is 580 or higher. For example, if you are buying a $250,000 home, you’ll need to put down $8,750.
The good news is that you can use gift funds from a family member to cover all or part of your down payment and closing costs.
To apply for an FHA loan, you’ll need to provide documents that verify your income and financial stability. Lenders will typically ask for:
Having this information organized in advance can speed up the process.
Not all mortgage lenders are approved to offer FHA loans. Look for a bank or mortgage company that specializes in working with first-time buyers in Texas. Herring Bank is an FHA-approved lender and can walk you through the application process from pre-approval to closing.
Before you begin house hunting, it’s wise to get pre-approved. A pre-approval letter shows sellers that you’re a serious buyer and can help you move quickly when you find the right property.
Once you’re pre-approved, work with a real estate agent to find homes within your price range. Keep in mind that FHA loans come with county-specific loan limits, which may affect what you can afford in cities like Austin, Houston, or San Antonio.
Also, the property must meet FHA appraisal standards, meaning it must be safe, sound, and sanitary.
After your offer is accepted, your lender will order an FHA appraisal and begin the underwriting process. This includes verifying your income, reviewing your credit, and confirming that the home meets FHA guidelines.
Once you’re approved, you’ll finalize the paperwork and pay any remaining closing costs. Some of these costs can be negotiated with the seller or covered by down payment assistance programs available in Texas.
While FHA loans are a popular option for first-time buyers in Texas, conventional loans may be a better fit for borrowers with strong credit and larger down payments.
If you’re not sure which loan type is best for your financial situation, compare the pros and cons here:
Compare FHA vs. conventional loans in Texas
Frequently Asked Questions
Yes. FHA loans allow you to use gift funds from family, an employer, or an approved charitable organization to help with your down payment and closing costs.
No. While FHA loans are popular with first-time buyers, you do not have to be one. Anyone who meets the FHA eligibility requirements can apply.
FHA loan limits vary by county. In 2025, most counties in Texas have a base limit of $498,257 for single-family homes, but higher-cost areas like Austin or Dallas may have higher limits. Check with your lender to verify your local cap.
Final Thoughts
FHA loans make it possible for more Texans to become homeowners. With flexible credit score requirements, low down payments, and friendly terms for first-time buyers, it’s easy to see why so many are choosing FHA financing in 2025.
If you are ready to take the next step, start by checking your credit, saving for your down payment, and reaching out to a trusted FHA lender. With the right preparation and support, you can qualify for an FHA loan and move into your first Texas home with confidence.
