Texas's mortgage market has its own distinct rules — from closing customs to transfer tax structure to the specific down payment programs available through the state's housing finance agency. This guide covers what's genuinely different about buying in Texas, not just the generic national mortgage process.
Texas at a Glance
Est. payment: $2,682/mo
Est. payment: $2,292/mo
Est. payment: $3,227/mo
Estimated payments assume 5% down, 6.82% 30-year fixed rate, plus $150/month insurance. Your actual payment will vary by lender, credit score, and specific property tax rate.
How Texas Closings Work
Texas allows either attorney or title-company closings, and the vast majority of residential transactions use title companies given the state's standardized TREC (Texas Real Estate Commission) contract forms used statewide.
Transfer tax: None — Texas is one of 13 states with no real estate transfer tax, a notable affordability advantage that partly offsets the state's high property tax rate.
The Texas Property Tax Quirk You Should Know
Texas has no state income tax, funding government heavily through property tax — the state's 1.60% average effective rate is among the highest in the nation, and unlike income tax, this cost doesn't scale down in a lower-earning year, making Texas property tax a more fixed, less flexible ongoing cost than buyers from income-tax states often anticipate. Texas's homestead exemption reduces school district taxable value by $100,000, a substantial and mandatory statewide benefit that must still be actively filed with the county appraisal district.
Texas's Down Payment Assistance Program
Texas Department of Housing and Community Affairs (TDHCA) My First Texas Home, My Choice Texas Home
My First Texas Home provides down payment/closing cost assistance up to 5% of the loan amount as a 0% interest, no-monthly-payment second lien, forgiven after 3 years of continuous occupancy — and TDHCA's programs are notably available to repeat buyers too through the separate My Choice Texas Home product, unlike most states' first-time-buyer-only restrictions.
USDA Rural Eligibility in Texas
Outside the Houston, San Antonio, Dallas-Fort Worth, and Austin metro cores, the majority of Texas — a geographically enormous state — qualifies for USDA financing, including large stretches of West Texas, the Panhandle, and East Texas.
Mortgage Loan Limits in Texas
| Loan Type | Limit | Down Payment |
|---|---|---|
| Conventional (Fannie/Freddie) | $766,550 | 3–20% |
| FHA (TX) | $766,550 | 3.5% |
| VA (eligible veterans) | No limit (full entitlement) | 0% |
| USDA (eligible rural areas) | No set limit | 0% |
Frequently Asked Questions
Texas allows either attorney or title-company closings, and the vast majority of residential transactions use title companies given the state's standardized TREC (Texas Real Estate Commission) contract forms used statewide.
Texas's transfer tax structure: None — Texas is one of 13 states with no real estate transfer tax, a notable affordability advantage that partly offsets the state's high property tax rate. This is typically disclosed on your Closing Disclosure and paid at settlement.
My First Texas Home provides down payment/closing cost assistance up to 5% of the loan amount as a 0% interest, no-monthly-payment second lien, forgiven after 3 years of continuous occupancy — and TDHCA's programs are notably available to repeat buyers too through the separate My Choice Texas Home product, unlike most states' first-time-buyer-only restrictions.
Outside the Houston, San Antonio, Dallas-Fort Worth, and Austin metro cores, the majority of Texas — a geographically enormous state — qualifies for USDA financing, including large stretches of West Texas, the Panhandle, and East Texas.
Sources for This Page
- Freddie Mac PMMS — national rate benchmark
- HUD FHA Mortgage Limits — TX loan limit data
- USDA Rural Development Eligibility — Texas rural zone verification
- Texas state Housing Finance Agency — program terms and current DPA availability