FHA Loan Texas: How to Qualify for an FHA Loan in Texas

How do I qualify for an FHA loan in Texas? The FHA loan program is one that is available in all the U.S. states and many U.S. territories. If you are looking to buy in Texas, the procedure is going to be similar to what it would be anywhere else.

However, there are a few key differences. Keep reading to find out everything you need to know, including:

  • What you will need to qualify
  • Maximum mortgage limits in Texas
  • Expert tips on choosing a lender

What do you need to qualify for an FHA loan in Texas?

To qualify, you will have to meet the requirements set by HUD as an absolute minimum.

What are the requirements to get an FHA loan?

Here’s an overview according to Andrina Valdes, the Division President at Cornerstone Home Lending, Inc. Cornerstone Home Lending is a nationwide mortgage lending company based out of Houston, TX that has served their communities for 30 years.

Texas FHA loan credit score requirements

“Borrowers must meet minimum credit requirements set by the Federal Housing Administration (FHA) and the lender. The FHA requires a minimum FICO credit score of 500 with a 10% down payment to qualify for an FHA loan, but many lenders have their own higher credit standards.

580 is the FHA-mandated minimum credit score needed to qualify for a 3.5% down payment. Typically, lenders require a 620 credit score to qualify, although they may make exceptions for lower credit scores with underwriting approval.”

Other FHA requirements

She continues, “The minimum down payment for an FHA loan is 3.5% and may be gifted to the borrower. Borrowers will also need to have at least two years of stable employment to qualify. Further, any bankruptcies on a borrower’s history need to be at least two years old, and foreclosures must be three years old.”

Borrowers should shop around with a few different lenders to understand the varying eligibility requirements and to see the range of rates available. By doing so, you are empowered to choose the lender that best suits your needs.

Learn how to get pre-qualified for a home loan

Can you get FHA loans in Texas with bad credit?

As Valdes explained above, the absolute lowest credit score that can qualify for an FHA loan is a 500, and most lenders set higher minimums to protect against defaults. However, there are some cases where exceptions are made.

If you are in the 500 to 619 range, you will need to seek out a more flexible lender. Keep in mind that the interest rate will likely be high and you will need to put down 10% if your credit score is under 580. It may be worth it to wait and invest in improving your credit score.

Quick ways to increase your credit score

What is the maximum FHA loan amount in Texas?

Texas FHA loan limits

“There’s no single FHA loan limit for the whole state. Limits vary by county and are based on the cost of local living in each area and housing type.

However, in December 2017, the Federal Housing Administration announced a general increase in loan limits for FHA loans across the nation, increasing the amount that homebuyers are allowed to borrow, thereby expanding their purchasing options,” explains Valdes.

To find the maximum limit for a particular area, visit the HUD FHA Mortgage Limits page.

2018 maximum mortgage limits for FHA-insured loans

The basic standard mortgage limits for FHA-insured loans are:

  • One-family: $294,515.00
  • Two-family: $377,075.00
  • Three-family: $455,800.00
  • Four-family: $566,425.00

High-cost area limits for 2018 are as follows:

  • One-family: $679,650.00
  • Two-family: $870,225.00
  • Three-family: $1,051,875.00
  • Four-family: $1,307,175.00

Be sure to look up your county on the HUD Maximum Mortgage Limit page to find the exact maximum loan amount that applies to you.

Where do you go to apply for an FHA loan?

“Since the FHA is only the insurer of the loan and not a lender, borrowers will need to find an FHA-approved mortgage lender. This designation means that the lender is able to accept, process, and close an FHA loan application,” says Valdes. Further, make sure they are licensed to lend in Texas.

She adds, “As with any home loan, it’s important for borrowers to shop around for the right lender, one that’s committed to service, and who can guide the borrower through a simple, on-time closing. Borrowers can start the search by asking their realtor or real estate agent for a referral, or can look online to compare lenders.”

Head over to our home loans review page to compare rates and terms from top lenders. You’ll find detailed reviews and real-user ratings for each company, so that you can easily compare your options all in one place.