Buying Your First Home in Texas: A Complete Guide

Tips for Buying Your First Home in Texas

By the time you finish this guide, you’ll confidently:

  • Understand the complete Texas homebuying timeline
  • Identify and access down-payment and closing-cost assistance
  • Find the best mortgage loan programs for first-time buyers
  • Avoid common hurdles and confidently make strong offers

🎯 Why 2025 Could Be the Best Time to Buy in Texas

Several current market trends support buying in 2025:

  • Higher inventory and more price flexibility in major metros like Dallas, Houston, Austin, and San Antonio
  • Stable median home prices despite higher mortgage rates
  • Flood of first-time buyer-friendly financing: Texas offers numerous low- or zero-down programs, especially post-COVID

With favorable conditions and expanded support from the TSAHC, TDHCA, and local agencies, it’s an ideal time to consider homeownership in the Lone Star State.

📌 Overview: 12 Essential Steps

The path from dream to keys involves:

  1. Evaluate finances
  2. Build savings
  3. Check your credit
  4. Learn about loan types
  5. Get pre-qualified
  6. Attend homebuyer education
  7. Pick a real estate agent
  8. House hunt smartly
  9. Lodge a solid offer
  10. Handle inspections & appraisal
  11. Finalize your loan
  12. Close and celebrate

We’ll unpack each step with Texas-specific insights and actionable tips.

1. Evaluate Your Finances

Start with a clear picture of your financial strength:

📊 Monthly Budget & Affordability

  • Experts recommend that your monthly housing costs stay within 28–32% of your net income
  • Texas homeowners benefit from generally lower property taxes than many states, boosting purchasing power

🕵️‍♂️ Credit Score & Down Payment

  • Conventional loans require at least 620+, FHA accepts down to 580, and VA/USDA may allow 0% down
  • The higher your score, the better your interest rate, saving you thousands long-term

💰 Save Strategically

  • Save for down-payment (3–20%) + 2–6% in closing costs
  • Keep 3–6 months of expenses in emergency funding

2. Build Savings & Explore Assistance

Texas offers powerful financial boosters:

✅ Down-Payment and Closing-Cost Assistance

  • TSAHC My First Texas Home & Homes Sweet Texas: up to 5% forgivable loans or grants
  • TSAHC Heroes Program for teachers, EMTs, veterans, etc., with extra help
  • Many counties and cities (e.g., San Antonio, Dallas) offer $5k–30k grants

📉 Mortgage Credit Certificates (MCCs)

  • Offers a 20–35% federal tax credit on yearly mortgage interest ($2k cap)

🏠 Partner with Approved Lenders

  • To access these programs, you must use approved mortgage providers on the TSAHC/TDHCA lists

3. Understanding Loan Types

Different loans suit different buyers:

Loan TypeDown PaymentCredit ScoreNotes
Conventional3–20%≥620Cancel PMI at 20% equity
FHA3.5%≥580Mortgage Insurance Required
VA0% (if eligible)Typically ≥620No PMI; must meet service criteria
USDA0% (rural only)≥620Must buy in eligible area

🔍 The right loan depends on your situation—military status, income, home location, and credit profile.

4. Get Pre-Qualified or Pre-Approved

💬 Pre-Qualification vs. Pre-Approval

  • Pre-Qualification: estimate based on self-reported info
  • Pre-Approval: official lender review; stronger; essential for serious offers

🧾 Documentation Checklist:

  • Tax returns & W-2s (2 years)
  • Recent pay stubs and bank statements
  • IDs + list of debts/credits

Having pre-approval sets explicit budget constraints and demonstrates to sellers that you’re a serious contender.

5. Complete Homebuyer Education

Many assistance programs require completion of an 8-hour HUD-approved course:

  • Typically costs $0–$100
  • Covers mortgage basics, budgeting, homeownership responsibilities, and foreclosure prevention
  • MCCs also often require completion before issuance

Upon finishing, you’ll increase your chances of qualifying for help programs and gain valuable confidence.

6. Choose a Texas-Savvy Real Estate Agent

A knowledgeable Texas real estate agent is invaluable:

Why do you need a pro who knows TX?

  • They understand state assistance programs and lender relationships
  • Expert guidance on negotiation, repairs, and local market trends
  • Better handling of Texas-specific issues (HOAs, MUDs, land plots, flood zones)

Ask for referrals from local realtors, mortgage officers, or peers.

7. Start Your Home Search

🏘️ Define Your Must-Haves

  • Budget, school districts, commute, amenities, style (e.g., new vs. resale, condo vs. single-family)
  • Use checklists to compare properties based on size, HOA, energy efficiency, and inspection costs

🌍 Explore Neighborhoods

  • Visit at different times to gauge traffic, noise, crime, vibe
  • Ask about walkability, transit, and future developments

🏡 Attend Open Houses

  • Observe property conditions and ask questions about updates, foundations, plumbing, and other relevant details.
  • Engage listing agents and compare multiple homes using your checklist

8. Make a Competitive Offer

In-demand markets may require strong offers:

  • Include earnest money deposit (1–2%) to show sincerity
  • Use smart contingencies—inspection, appraisal, financing
  • Consider lender buy-down credits or seller concessions
  • Have financing, DPA, and MCCs lined up to bolster your position

In competitive situations, sellers may prefer buyers with financing-ready, no-appraisal-contingency offers—discuss strategy with your agent.

9. Home Inspections & Appraisal

🕵️‍♂️ Home Inspection (~$300–500)

  • Licensed inspector checks structural, electrical, plumbing, roofing
  • Request major repairs or credit toward closing

🏦 Appraisal (~$400–600)

  • Required by the lender to confirm value aligns with the offer
  • Discoveries here may impact your loan—be prepared to renegotiate

10. Final Loan Approval & Closing Preparation

Final underwriting includes:

  • Double-checking income, assets, debts, and insurances
  • Finalizing property insurance, title, and escrow details
  • Maintain current finances—no large purchases or new debts

Review your Closing Disclosure 3 days before closing to compare actual costs and loan terms with your Loan Estimate.

11. Closing Day: Signing & Aftercare

📄 Final Walkthrough

  • Last 24-hour check to confirm needed repairs and no new damage

✍️ Sign Documents

  • Bring ID, proof of insurance, and final payment for down payment + closing costs
  • Expect roughly 2 hours to sign, then receive your keys!

🎉 Welcome to homeownership!

12. Post-Closing Wisdom & Key Maintenance

✅ Insurance & Taxes

  • Ensure the homeowner’s insurance, title, and escrow are active
  • File your MCC certificate with the IRS each year with the assistance of a tax advisor

🔧 Home Upkeep

  • Create maintenance budget: HVAC, landscaping, structural needs
  • Stay ahead of repairs to preserve your investment

📈 Equity Building

  • Refinance or pay PMI when equity builds
  • Consider leveraging home equity for home improvements or financial goals

💸 Special Texas Assistance Programs (2025)

🏠 TSAHC — My First Texas Home & Homes for Texas Heroes

  • Conventional or government loans + up to 5% DPA, and MCC eligibility
  • The Heroes program for qualifying professions with higher income caps

📚 MCC (Mortgage Credit Certificate)

  • Federal tax credit = percentage of interest paid, up to $2k/year
  • Unique Texas advantage: lender may count credit as “income” to boost qualifying amounts

🏛️ TDHCA — My First Texas Home Program

  • 30-year fixed conventional loan + 3% DPA
  • Accessible statewide with income and purchase price caps

🏘️ Local Programs

  • San Antonio, Houston, Dallas, and Austin offer city/county-specific grants ($5k–$30k)
  • Often stackable with state programs—check housing authority websites

🎯 Insider Tips to Win

  1. Start early: Down-payment aid is limited and first-come, first-served
  2. Bundle assistance: State + local DPA + MCC + VA/USDA/FHA
  3. Team up with specialists: Agents and lenders who know Texas programs boost your odds
  4. Protect your credit: Keep active credit clean and low-use
  5. Stay organized: Use checklists for homes and closing docs
  6. Ask questions: Never hesitate to clarify—it’s your biggest purchase

🧩 Real Buyer Stories

  • Andrea from Laredo: used an interest‑free forgivable second lien + FHA to buy post-COVID
  • Ila, 22, in Forney: bought with FHA and house-hacked rooms to cover costs and build wealth

These Texans leveraged creative financing and support programs to buy their dream homes early.

📅 Estimated Timeline

PhaseEstimated Duration
Financial Prep + Education1–3 months
Mortgage Pre-Approval1–2 weeks
House Hunting1–4 months
Offer to Closing~30 days
Total Process3–8 months

📉 Buying in 2025 requires patience, but planning well positions you perfectly.

✅ Final Takeaway

By following this updated 2025 guide, Texas first-time buyers can navigate current market conditions, effectively stack assistance programs, and confidently step into homeownership. Prioritize financial readiness, leverage Texas-specific grants and loans, and assemble an expert team to guide you.