Texas is one of the most active housing markets in the country, and for good reason. Between a booming economy, no state income tax, and strong population growth, buying a home here remains one of the smartest financial moves you can make.
I tell my Texas clients that understanding the mortgage landscape before you start house-hunting is the single most valuable thing you can do. The Lone Star State has unique rules around homestead exemptions, community property, and state-run assistance programs that can save you tens of thousands of dollars.
Whether you're eyeing a starter home in San Antonio, a suburban retreat in the DFW Metroplex, or a condo in Austin, this guide breaks down everything you need to know about Texas mortgages in 2026. Let's walk through rates, programs, and strategies that actually work.
Texas Mortgage Rates in 2026: Where We Stand
Texas 30-year fixed mortgage rates in spring 2026 average around 6.52%, slightly above the national average. Rates vary by metro, credit score, and loan type. Borrowers with strong credit profiles and 20% down can secure rates in the low 6% range, while FHA and VA loans offer competitive alternatives for qualifying buyers.
Mortgage rates in Texas have stabilized after years of volatility, and I'm seeing more predictable pricing across the board. The spring 2026 environment is giving buyers a window that's significantly better than the peaks we saw in late 2023 and early 2024.
Texas rates tend to run slightly above the national average because of the state's higher property taxes, which increase lender risk. However, the absence of a state income tax means your overall monthly housing cost can actually be lower than states with cheaper mortgages but hefty income taxes.
For a deeper dive on where rates are headed, check out my 2026 rate predictions analysis. Understanding the trajectory helps you decide whether to lock now or float.
Rate Comparison by Loan Type in Texas
TDHCA Programs: Texas's Best-Kept Secret for Homebuyers
The Texas Department of Housing and Community Affairs (TDHCA) runs two flagship programs: My First Texas Home and My Choice Texas Home. Both offer below-market mortgage rates and up to 5% of the loan amount in down payment and closing cost assistance, structured as a deferred forgivable second lien.
I genuinely believe TDHCA programs are among the most generous state-level homebuyer assistance programs in the country. My First Texas Home is designed for first-time buyers (or anyone who hasn't owned a home in three years), while My Choice Texas Home is open to repeat buyers as well.
Both programs work through a network of approved lenders and pair a competitive first mortgage with a second lien that covers your down payment. The second lien is typically forgivable after a set period, meaning that money could become a grant if you stay in the home.
My First Texas Home vs. My Choice Texas Home
| Feature | My First Texas Home | My Choice Texas Home |
|---|---|---|
| Eligible Buyers | First-time or haven't owned in 3 years | First-time and repeat buyers |
| DPA Amount | Up to 5% of loan amount | Up to 5% of loan amount |
| DPA Structure | Deferred forgivable second lien | Deferred forgivable second lien |
| Loan Types | FHA, VA, USDA | FHA, VA, USDA, Conventional |
| Income Limits | Vary by county and household size | Vary by county and household size |
| Purchase Price Limits | Vary by county | Vary by county |
| Homebuyer Education | Required | Required |
The key difference I explain to my clients is flexibility. My Choice Texas Home opens the door for repeat buyers and includes conventional loan options, which can mean lower mortgage insurance costs for borrowers with stronger credit.
Income limits are county-specific and tend to be quite reasonable in most Texas metros. In the DFW area and Houston, the limits accommodate moderate-income households comfortably.
Comparing Texas Mortgage Programs: FHA, VA, USDA, Conventional, and TDHCA
Texas buyers have five major mortgage paths: conventional loans for strong-credit buyers, FHA for flexible qualifying, VA for veterans and service members, USDA for eligible rural and suburban areas, and TDHCA-backed loans with built-in down payment help. Each program serves different buyer profiles and financial situations.
| Program | Min. Down | Credit Score | MI Required? | Best For | Texas Notes |
|---|---|---|---|---|---|
| Conventional | 3–5% | 620+ | Yes, until 80% LTV | Strong credit, savings | Pair with TDHCA My Choice |
| FHA | 3.5% | 580+ | Yes, for life of loan | Lower credit, limited savings | High loan limits in metro counties |
| VA | 0% | No minimum (most lenders want 620) | No | Veterans, active military | Major bases: Fort Cavazos, Fort Bliss, JBSA |
| USDA | 0% | 640+ | Guarantee fee (low) | Rural and suburban buyers | Large eligible areas outside major metros |
| TDHCA-Backed | 0% effective (with DPA) | Varies by underlying loan | Depends on loan type | First-time & repeat buyers | Up to 5% DPA as forgivable second lien |
One thing I always emphasize is that these programs aren't mutually exclusive. You can stack TDHCA assistance on top of an FHA or VA loan, which means a veteran could potentially buy a home with zero out-of-pocket costs.
If you're self-employed and wondering how these programs work with non-traditional income documentation, take a look at my self-employed mortgage guide. The qualifying rules in Texas are the same federal guidelines, but the nuances matter.
Texas-Specific Rules Every Buyer Must Know
Texas has unique real estate laws that directly affect mortgage borrowers. The homestead exemption protects your primary residence from most creditors and reduces your property tax burden. Texas is also a community property state, meaning both spouses' debts and assets are considered in mortgage qualification regardless of who is on the application.
The Homestead Exemption
Texas offers one of the strongest homestead protections in the nation. Once you designate your home as your homestead, it's shielded from forced sale by most creditors (excluding mortgage lenders, property taxes, and HOA liens).
Beyond asset protection, the homestead exemption directly reduces your property tax bill. In 2026, Texas homeowners receive a $100,000 school district exemption plus any additional exemptions offered by their county, city, or special districts.
Community Property and Mortgage Qualification
This is where I see buyers get surprised. Texas is one of nine community property states, which means if you're married, your spouse's debts are considered yours for mortgage qualifying purposes—even if only one of you is on the loan application.
I tell my Texas clients who are married to pull both credit reports early. If one spouse has significant debt or credit issues, we need to factor that into our strategy from day one rather than being blindsided at underwriting.
Texas Cash-Out Refinance Rules (Section 50(a)(6))
Texas has historically strict rules around home equity lending. Cash-out refinances (called Section 50(a)(6) loans) are capped at 80% loan-to-value, require a 12-day cooling period, and come with specific closing requirements not found in other states.
These rules actually protect Texas homeowners from over-leveraging, which is part of why Texas foreclosure rates stayed lower during past downturns. For more on using your mortgage as a wealth-building tool, read my piece on treating your mortgage as a wealth instrument.
First-Time Buyer Roadmap: Step by Step in Texas
Pull both spouses' credit reports (remember community property rules). Calculate your comfortable monthly payment including Texas property taxes, which average 1.6–1.8% of home value annually.
Determine if you qualify for My First Texas Home or My Choice Texas Home. Contact a TDHCA-approved lender to get pre-qualified for the assistance before shopping for homes.
Lock in your pre-approval with a lender who understands Texas-specific programs. A strong pre-approval letter with TDHCA backing makes your offer stand out in competitive metro markets.
TDHCA requires an approved homebuyer education course. Do this early—it's usually a one-day course (online or in-person) and is required before closing on any TDHCA-assisted loan.
Work with a Texas-licensed real estate agent. Use the option period (typically 7–10 days) for inspections—this is a Texas-specific contractual right that lets you back out for any reason.
After closing, immediately file your homestead exemption with your county appraisal district. You have until April 30 of the following year, but filing early ensures you don't miss the tax savings.
FHA, VA, and USDA Eligibility Across Texas Metros
FHA loan limits in Texas vary by county, with high-cost metro counties like Collin, Travis, and Fort Bend offering limits above the standard floor. VA loans have no county-based loan limit for borrowers with full entitlement. USDA eligibility covers a surprisingly large portion of Texas, including suburbs of major metros.
FHA in Texas Metros
FHA loans are popular across Texas because they allow credit scores as low as 580 with 3.5% down. In many Texas counties, the 2026 FHA loan limit sits at the standard floor of $524,225, but higher-cost counties push above that threshold.
I see FHA work especially well for buyers in Houston, San Antonio, and El Paso where median home prices sit comfortably within FHA limits. In Austin and parts of DFW where prices have climbed, you may bump up against those limits on larger homes.
VA Loans and Texas Military Communities
Texas is one of the most military-friendly states in the country, home to major installations including Fort Cavazos (Killeen), Joint Base San Antonio, and Fort Bliss (El Paso). VA loans offer zero down, no monthly mortgage insurance, and some of the lowest rates available.
With full VA entitlement, there is no county loan limit—you can buy as much home as a lender will approve. I tell my veteran clients that VA loans are almost always the best option when available, and pairing them with TDHCA assistance makes an already strong program even more powerful.
USDA Rural Development Loans
Don't let the word "rural" fool you. USDA eligibility maps in Texas include areas that most people would call suburban, including communities on the outskirts of Houston, DFW, San Antonio, and Austin.
The zero-down benefit and low guarantee fees make USDA loans incredibly attractive for buyers willing to look slightly outside core metro areas. Income limits apply based on household size and county, but many moderate-income families qualify comfortably.
Down Payment Assistance Beyond TDHCA
While TDHCA is the headline program, several Texas cities and counties offer their own down payment assistance. Houston's HOPE program, the City of San Antonio DPA, and the Austin Housing Finance Corporation all provide additional layers of help.
These local programs can sometimes be combined with TDHCA assistance, though stacking rules vary. I always recommend checking with a lender who specializes in Texas DPA programs because the landscape changes frequently and combining programs requires precise coordination.
Texas Property Taxes: The Hidden Factor in Your Mortgage Payment
No discussion about Texas mortgages is complete without addressing property taxes. Texas has no state income tax, but property taxes average 1.6–1.8% of assessed value—among the highest in the nation.
On a $335,000 home, you could be paying $5,360–$6,030 per year in property taxes, which adds $447–$503 to your monthly mortgage payment through escrow. I always make sure my Texas clients factor this into their budget before falling in love with a home at the top of their pre-approval range.
The homestead exemption helps significantly, and protesting your property tax appraisal annually is almost a rite of passage in Texas. Many homeowners successfully reduce their assessed value by 5–15% through the protest process, which directly lowers their tax bill.
Insurance Costs in Texas
Homeowners insurance in Texas runs higher than the national average due to weather risks including hail, windstorms, and flooding. Expect to pay $2,500–$4,500 annually depending on location, coverage, and whether you're in a flood zone.
If you're buying near the Gulf Coast, flood insurance is often mandatory and adds another layer of cost. Inland metros like DFW, Austin, and San Antonio typically have lower insurance premiums, though hail damage claims have pushed rates up across North Texas.
Metro-by-Metro Snapshot
Median: $380K. Strong job market driving demand. USDA-eligible suburbs in outer counties. High property tax rates in Collin and Denton counties offset by strong appreciation.
Median: $320K. Sprawling metro with wide price range. Flood zone awareness is critical. Strong VA activity near Clear Lake and energy corridor.
Median: $430K. Prices corrected from 2022 peak, now stabilizing. Tech layoffs created buyer opportunities. USDA eligible in Hays, Bastrop, and Williamson outskirts.
Median: $285K. Most affordable major Texas metro. Massive VA buyer pool from Joint Base San Antonio. Excellent TDHCA utilization rates and growing suburban inventory.
Interested in how the Texas market stacks up against the Midwest? My Illinois mortgage guide covers a very different market with its own set of state-specific programs and considerations.
Frequently Asked Questions
The Bottom Line: Texas Is Still a Buyer-Friendly Market
Texas remains one of the best states in the country for homebuyers who do their homework. Between TDHCA programs, strong job markets in multiple metros, and the absence of state income tax, the math works for more people here than almost anywhere else.
I've watched hundreds of clients build wealth through Texas real estate, and the combination of state-level assistance programs with federal loan options creates pathways that simply don't exist in most other states. The key is working with someone who knows how to navigate the Texas-specific rules and stack the right programs for your situation.
If you're ready to start your Texas homebuying journey, reach out. I'll help you map out the best combination of loan type, assistance programs, and strategy for your specific goals and financial profile.