FHA Loans in Texas Low Down Payment, Flexible Qualifying
FHA loans are one of the most flexible mortgage options available — and one of the most misunderstood. If you have a credit score of 580 or above and can put 3.5% down, you may qualify for an FHA loan even if a bank has turned you down. As an independent Texas mortgage broker, Russell Stout shops your FHA loan across 40+ wholesale lenders to find you the best rate and terms — with no lender fees added on top.
FHA LOANS
- Low Down Payments
- Insured by FHA (Texas Mortgage Consultants, PLLC is not acting on behalf of or at the direction of the federal government.)
What Is an FHA Loan?
FHA loans are especially popular with:
- First-time homebuyers who haven't had time to build a large down payment
- Buyers with credit scores between 500–680 who don't yet qualify for the best conventional rates
- Buyers with higher debt-to-income ratios who need more flexibility
- Anyone re-entering the housing market after a financial setback
Texas Mortgage Consultants, PLLC is not acting on behalf of or at the direction of the federal government.
FHA Loan Requirements in Texas (2026)
| Requirement | FHA Standard |
|---|---|
| Minimum credit score | 580 (3.5% down) — as low as 500 with 10% down |
| Minimum down payment | 3.5% of purchase price |
| Maximum debt-to-income ratio | Up to 50% with compensating factors |
| Employment | 2-year employment history preferred |
| Property type | Primary residence only |
| Loan limit (most TX counties) | $541,287 |
Credit score between 500–579? You may still qualify with 10% down. Not all lenders will approve this — but with access to 40+ wholesale lenders, we can find one that will if the rest of your file is strong.
FHA Mortgage Insurance — What You Need to Know
The biggest trade-off with an FHA loan is mortgage insurance. Here's exactly how it works so there are no surprises:
Upfront Mortgage Insurance Premium (UFMIP)
- 1.75% of your loan amount, rolled into the loan at closing
- On a $300,000 loan: approximately $5,250 added to your balance
Annual Mortgage Insurance Premium (MIP)
- Approximately 0.55% of the loan balance per year, paid monthly
- On a $300,000 loan: roughly $138/month
How long does MIP last?
If you put less than 10% down, FHA mortgage insurance stays for the life of the loan. The most common strategy is to refinance into a conventional loan once you've built 20% equity — at that point, conventional PMI drops off and your payment goes down.
If you put 10% or more down, MIP cancels after 11 years.
FHA vs. Conventional — Which Is Right for You?
| FHA | Conventional | |
|---|---|---|
| Min. credit score | 580 (500 with 10% down) | None with 20%+ down (620 under 20%) |
| Min. down payment | 3.5% | 3–5% |
| Mortgage insurance | Life of loan (if <10% down) | Cancels at 20% equity |
| Best for | Lower credit, limited savings | 680+ credit, long-term hold |
| Property condition | Stricter HUD standards | More flexible |
| Loan limit (TX 2026) | $541,287 | $832,750 |
Not sure which fits your situation? We'll run both scenarios with your real numbers so you can see the monthly payment, total cost over 5 years, and the long-term comparison before you decide.
FHA Loan Limits in Texas (2026)
Most counties in Texas have an FHA loan limit of $541,287 for a single-family home in 2026. Higher limits apply in the Austin metro — $571,550 in Travis, Williamson, Hays, Bastrop, and Caldwell counties — plus Dallas–Fort Worth ($563,500) and San Antonio ($557,750).
If you're purchasing above this limit, a conventional loan or jumbo product may be the better route — and we can help you compare both.
Why Work with a Broker for Your FHA Loan?
When you go directly to a bank, you get one rate — take it or leave it. As a wholesale mortgage broker, Russell shops your FHA loan across dozens of lenders at once and presents you with the best option. You apply once, he does the rate shopping.
And unlike most lenders, Texas Mortgage Consultants charges no lender fees. That means more savings at closing, and more money staying in your pocket.
Who Should Consider an FHA Loan?
FHA might be the better fit if:
- Your credit score is below 660 and you're still building it
- You have limited savings and need the lowest possible down payment
- Your debt-to-income ratio is on the higher side
- You plan to refinance in a few years anyway
Conventional might be the better fit if:
- Your credit score is 680 or above
- You can put at least 5–10% down
- You want mortgage insurance to eventually go away
- You're buying in a price range that pushes FHA limits
- You're in a competitive market where seller perception matters
Frequently Asked Questions
Can I get an FHA loan with a 580 credit score in Texas? Yes — and even a 500 credit score can qualify with 10% down. A 580 score qualifies for FHA's standard 3.5% down program; between 500–579, 10% down is required and not every lender will approve it, but with access to 40+ wholesale lenders we can usually find one that will if the rest of your file is strong.
How much do I need for a down payment on an FHA loan? The minimum is 3.5% of the purchase price with a 580+ score. On a $300,000 home, that's $10,500. Down payment can come from your own savings, a gift from family, or an approved down payment assistance program.
Can I combine an FHA loan with down payment assistance in Texas?
Yes. Several of our wholesale lenders offer down payment assistance programs that pair with FHA loans, with credit scores as low as 600 accepted. That's a higher floor than the 500 minimum for a standalone FHA loan, since assistance programs carry their own guidelines — but it means little to no cash needed at closing for well-qualified buyers. Ask us which programs you may qualify for.
Does FHA mortgage insurance ever go away? If you put less than 10% down, MIP stays for the life of the loan. The most common exit strategy is refinancing into a conventional loan once you reach 20% equity. We'll walk you through when that makes sense for your situation.
What's the FHA loan limit in Austin, TX? For 2026, the FHA loan limit for Travis County (Austin) is $571,550 for a single-family home.
Can I use an FHA loan to buy a duplex or investment property? FHA is for primary residences only. However, you can use an FHA loan to buy a 2-4 unit property as long as you live in one of the units.
How long does FHA approval take? Most pre-approvals through Texas Mortgage Consultants are completed within 24–48 hours of receiving your documents.
Ready to See If an FHA Loan Is Right for You?
I'll run the numbers for your exact situation — credit score, down payment, purchase price — and show you FHA vs. conventional side by side. No obligation, no pressure, just clear answers.
Call or text: (512) 423-4663 
Get pre-approved: texasmortgageconsultants.com
Russell Stout | Texas Mortgage Consultants, PLLC NMLS# 220896 | Company NMLS# 1843758 | Texas SML License# 220896 8805 Lemens Spice Trail, Austin, TX 78750 | Equal Housing Lender Texas Mortgage Consultants, PLLC is not acting on behalf of or at the direction of the federal government.
