Buying a home is one of the biggest financial decisions you’ll ever make — and the down payment is usually the first question on every buyer’s mind. If you’ve been putting off homeownership because you think you need a full 20% saved up, here’s the good news: you don’t.
Whether you’re a first-time buyer in Dallas, a growing family in Houston, or relocating to San Antonio, this guide breaks down exactly what to expect from down payments in Texas — including the loan programs that make homeownership more reachable than you think.
The 20% Myth — What Texas Buyers Actually Pay
The “20% rule” has been around for decades, but it no longer reflects how most people buy homes. According to the National Association of Realtors, the average down payment for first-time buyers is just 6%. Repeat buyers tend to put down around 17%.
The reality is that your down payment depends on the loan program you choose, your credit score, and your financial goals — not a one-size-fits-all rule.
Current Texas Home Prices at a Glance
Before diving into percentages, it helps to know what you’re working with. The median home price in Texas currently sits around $362,200, though that number shifts significantly by city:
- Dallas: ~$349,500
- Houston: ~$329,400
- Austin: Higher than state average, still softening from peak
- San Antonio: ~$309,700 — one of the most affordable major metros
Use a Mortgage Calculator Texas tool to run the math for your target city and see how different down payment amounts affect your monthly payment.
Down Payment Requirements by Loan Type
Not all home loans are created equal. Here’s a quick breakdown of what home lenders in Texas typically require:
Conventional Loans
- Down payment: 3%–20%, (3% only for first time homebuyers and come with higher PMI and other conditions.
- Credit score: 620 minimum (740+ for best rates)
- PMI: Required if you put down less than 20%, but can be removed once you reach 20% equity
- Best for buyers with solid credit and stable income
FHA Loans — Dallas TX and Statewide
- Down payment: 3.5% with a 580+ credit score; 10% with a 500–579 score
- Credit score: Minimum 500 (scores under 620 must be approved by automated FHA underwriting)
- One of the most popular programs for first-time buyers and those rebuilding credit
- Requires mortgage insurance for the life of the loan (if less than 10% down)
FHA loans in Dallas TX are especially popular given the city’s competitive market — they let buyers get into a home sooner without waiting years to save a large down payment.
VA Loans
- Down payment: $0 required (For eligible veterans, a down payment may lower the VA funding fee) (Texaslending.com does require a 580 credit score)
- Who qualifies: Active-duty military, veterans, and eligible surviving spouses
- No private mortgage insurance requirement, although VA does charge a funding fee
- Excellent option for Texas’s large military communities
USDA Loans
- Down payment: $0 required (Texaslending.com does require a 580 credit score)
- Who qualifies: Buyers in eligible rural and suburban areas of Texas
- Income limitations apply
- USDA also has upfront Mortgage insurance charge and a monthly charge with your house payment.
- A surprisingly large portion of Texas geography qualifies
Down Payment Assistance Programs in Texas
Texas offers some of the best homebuyer assistance programs in the country. If saving upfront is your biggest obstacle, these can make a real difference.
Texas State Affordable Housing Corporation (TSAHC)
TSAHC offers two statewide programs for buyers:
- Home Sweet Texas Home Loan Program — designed for low-to-moderate income buyers; offers down payment assistance as an outright grant or forgivable second mortgage
- My Choice Texas Home — open to both first-time and repeat buyers; allows conventional or government-backed loans with down payment assistance
Both programs require a minimum 620 credit score and have income and purchase price limits that vary by county.
My First Texas Home (TDHCA)
Offered through the Texas Department of Housing and Community Affairs, this program pairs a 30-year fixed mortgage with down payment and closing cost assistance of up to 5% of the loan amount.
Texas Mortgage Credit Certificate (MCC)
If you’re approved for a TSAHC loan, you may also qualify for a Mortgage Credit Certificate worth up to $2,000 per year in federal tax savings — based on a percentage of the mortgage interest you pay annually.
Veterans Land Board (VLB)
Texas veterans have an additional resource through the VLB Housing Assistance Program, which offers low-interest loans that frequently require no down payment. Veterans with a VA disability rating of 30% or higher may qualify for even lower interest rates.
Closing Costs: The Other Upfront Expense
Your down payment isn’t the only money you’ll need at the closing table. Most buyers also pay closing costs, which typically run 2%–3% of the purchase price.
On a $349,500 home, that’s roughly $7,000–$10,000 in addition to your down payment. The good news: closing costs can sometimes be covered by the seller, a lender credit, or bundled into certain assistance programs.
A few other upfront expenses to plan for:
- Earnest money deposit (typically 1% of the purchase price, credited at closing)
- Home inspection fees
- Appraisal fee
- Homeowner’s insurance (first year paid upfront)
- Property tax escrow
How Down Payment Size Affects Your Loan
The amount you put down directly influences your mortgage in several ways:
Down Payment | PMI Required? | Monthly Payment | Long-Term Cost |
3–5% | Yes | Higher | Higher |
10% | Usually | Moderate | Moderate |
20%+ | No | Lower | Lower |
On some FHA loans there will be MIP (mortgage insurance premium) paid even with 20% down payment. A larger down payment reduces how much you borrow, which lowers your monthly payment and the total interest you pay over the life of the loan. That said, many buyers find it smarter to enter the market sooner with a smaller down payment — especially in markets where home values are appreciating.
Tips for Preparing Your Down Payment
- Season your funds. Lenders typically want to see that your down payment funds have been sitting in your account for at least 60 days.
- Gifted funds are allowed. Many loan programs permit gift funds from family members or an employer, as long as they’re properly documented with a gift letter.
- Check your credit before applying. Your credit score directly affects your rate and the down payment requirements you’ll face.
- Use a Mortgage Calculator Texas tool. Running the numbers helps you see the real cost difference between a 3.5% down FHA loan and a 10% conventional loan.
- Explore Texas home equity lending options if you already own property. Existing homeowners may be able to tap home equity in Texas to help fund a move-up purchase.
Ready to Get Pre-Approved?
Working with experienced home lenders in Texas is the fastest way to understand exactly what you qualify for. At TexasLending (NMLS #2297), our licensed mortgage consultants can walk you through your loan options, help you identify any down payment assistance programs you qualify for, and get you pre-approved at current mortgage rates.
Whether you’re exploring FHA loans in Dallas TX, VA options, or a conventional purchase, we’ll help you find the right path forward.
→ Get a Custom Mortgage Rate Quote from TexasLending
Frequently Asked Questions
What is the minimum down payment for a house in Texas in 2026?
It depends on the loan type. FHA loans require as little as 3.5% down (with a 580+ credit score and fha automated underwriting approval). VA and USDA loans allow 0% down for qualifying buyers. Conventional loans can start as low as 3% for eligible borrowers.
Do I need 20% down to avoid paying PMI in Texas?
Yes — if you’re using a conventional loan, putting down at least 20% lets you avoid private mortgage insurance (PMI). However, many buyers opt for lower down payments and remove PMI once they’ve built 20% equity in their home.
Are there down payment assistance programs for first-time buyers in Texas?
Yes. Programs like TSAHC’s Home Sweet Texas and the TDHCA’s My First Texas Home offer up to 5% in assistance — as either a grant or forgivable second mortgage. Most require a minimum 620 credit score and have income limits by county.
Can I use gift money for my Texas down payment?
Most loan programs — including FHA and conventional — allow gifted funds from family members, as long as the gift is properly documented with a letter from the donor confirming it does not need to be repaid.
How much should I budget for closing costs in Texas?
It depends on the loan. FHA loans allow scores as low as 500 (with 10% down) or 580 (with 3.5% down). Conventional loans typically require 620+, and the best rates go to borrowers with scores of 740 or higher.
What credit score do I need to buy a house in Texas?
It depends on the loan. FHA loans allow scores as low as 500 (with 10% down) or 580 (with 3.5% down). Conventional loans typically require 620+, and the best rates go to borrowers with scores of 740 or higher.
Does TexasLending offer FHA loans in Dallas?
Yes. TexasLending (NMLS #2297) offers FHA loan options for buyers across Texas, including Dallas, Fort Worth, Houston, San Antonio, and Austin. Contact a licensed mortgage consultant to discuss your eligibility and current rates.
For eash loan type expect closing costs from 2-3% of the loan amount plus upfront property taxes and home owners insurance. APRs for all loan types will vary based on loan size, Loan to value, and how you structure your loan. All loans and borrowers will have differing loan conditions including debt to income ratio, credit requirements, income documentation, asset documentation, lock periods, as well as other conditions.
Since 1998 Texaslending.com has funded over $20 billion in home loans for Texans. As a consumer direct lender we specialize in customizing your Conventional, Jumbo, FHA, VA, USDA, for home purchase, refinacing, home equity and HELOC loans.
