Texas Home Loans: What You Need to Know to Qualify

Your Guide to Securing a Home Loan in Texas

Getting a mortgage in Texas requires meeting specific qualification requirements, but the process is more straightforward than many first-time buyers expect. Whether you’re looking at traditional homes or manufactured housing options, understanding these key requirements will help you prepare for homeownership success.

Here’s what you need to qualify for a Texas mortgage:

• Credit Score: Minimum 580-620 depending on loan type (FHA allows 580, conventional typically requires 620)
• Down Payment: As low as 3.5% for FHA loans, with Texas median down payment around $20,000
• Debt-to-Income Ratio: Generally no more than 45% for conventional loans, up to 57% for FHA loans
• Income Verification: Stable employment history with pay stubs, tax returns, and W-2s
• Assets: Proof of funds for down payment and closing costs through bank statements

Texas offers several advantages for homebuyers. The state’s median home sales price of $354,375 remains competitive, and the homeownership rate of 63.3% reflects accessible opportunities. First-time buyers can benefit from programs like My First Texas Home, which offers down payment assistance up to 5% of the loan amount.

Current mortgage rates in Texas are hovering between 6-7%, down from recent highs near 8% in late 2023. While rates have decreased, they’re still above historical averages, making it crucial to shop around with multiple lenders.

The qualification process involves three main pillars: your credit history, your income stability, and your available assets. Lenders will verify each of these areas thoroughly, but preparation makes the difference between approval and rejection.

Understanding the Texas Housing Market and Mortgage Rates

The Texas housing market is like the state itself – big, diverse, and full of opportunities. From manufactured homes in Victoria to busy neighborhoods in Houston and Austin, understanding where the market stands today will help you make smarter decisions when getting a mortgage in Texas.

Current Market Statistics

Right now, Texas homebuyers are looking at a median home sales price of $354,375, with the median home value sitting at $315,815. If you’re wondering about that down payment, most Texans are putting down around $20,000 – though this can vary quite a bit depending on your loan type and the home you choose.

Here’s something encouraging: 63.3% of Texans own their homes as of the first quarter of 2025. That’s a strong homeownership rate that shows just how achievable the dream of owning a home can be in our state.

But here’s where it gets interesting – Texas is huge, and what’s happening in one city might be completely different from another. Houston has seen home prices jump more than 6% over the past year, while Austin has experienced a much gentler 0.7% increase during the same period. This is exactly why looking at your local market matters so much when you’re planning your purchase.

For more detailed insights into specific areas across Texas, you can check out comprehensive data from ATTOM. We also share regular market updates on our Blog to help you stay informed about trends that might affect your home buying journey.

Mortgage Rate Trends in Texas

Let’s talk about the elephant in the room – mortgage rates. If you’ve been watching the news, you know rates have been on quite a roller coaster ride lately. We saw them climb to around 8% in late 2023, which had many potential buyers hitting the pause button.

The good news? Rates have come down from those peaks and are now hovering between 6% and 7% for most borrowers. While that’s still higher than the rock-bottom rates we saw a few years ago, it’s definitely more manageable than where we were.

This rate environment has created an interesting opportunity for homeowners. More than 19,400 Texans filed refinance applications in May alone – that’s a whopping 42% increase compared to the same time last year. Many folks are either trying to lower their monthly payments or tap into the equity they’ve built up in their homes.

Whether you’re looking at a 30-year fixed mortgage for that long-term stability or considering a 15-year fixed to build equity faster, keeping an eye on these trends can help you time your application just right. The key is staying informed and being ready to move when the numbers work in your favor.

Key Factors Lenders Consider for a Texas Mortgage

When you’re ready to take the exciting step of getting a mortgage in Texas, understanding what lenders look for can help you feel confident and prepared. Think of it like preparing for a job interview – the better you understand what they’re looking for, the better you can present yourself as the ideal candidate.

Lenders essentially want to answer one key question: Will you be able to make your monthly payments reliably? To figure this out, they examine three main areas of your financial life.

Your Credit Score and History

Your credit score is like your financial report card – it tells lenders how you’ve handled money in the past. The most common score is the FICO score, which ranges from 300 to 850. Higher scores mean better loan terms and interest rates, which can save you thousands of dollars over the life of your loan.

For most manufactured home loans in Texas, you’ll need a minimum credit score of 620. But don’t worry if your score isn’t quite there yet – FHA loans can work with scores as low as 580 with just a 3.5% down payment. Even if your score is around 500, you might still qualify for an FHA loan with a 10% down payment.

Lenders dig deeper than just the number, though. They look at your payment history (making payments on time is huge!), your credit utilization (how much of your available credit you’re actually using), and how long you’ve been building credit.

We know that life happens, and not everyone has perfect credit. That’s exactly why we created our FICO Score Improvement Program to help folks in Victoria and throughout Texas boost their scores and improve their chances of getting approved.

Your Income and Debt-to-Income (DTI) Ratio

Here’s where lenders want to see that you can comfortably afford your new mortgage payment along with your other monthly obligations. They calculate something called your debt-to-income ratio, which compares all your monthly debt payments (including your future mortgage) to your gross monthly income.

Most conventional loans prefer a DTI ratio of 45% or lower. FHA loans are often more flexible, typically allowing DTI ratios between 31% to 57% depending on other factors like your credit score and down payment.

Lenders want to see stable income, which usually means providing recent pay stubs from the last 30 days and W-2 statements or 1099s from the past two years. If you’re self-employed, they’ll typically want two years of tax returns to understand your income patterns.

The good news? Manufactured home loans often have more flexible DTI requirements than traditional mortgages, making homeownership more accessible for working families.

Your Assets and Down Payment

Finally, lenders need to verify that you have enough money for your down payment and closing costs, plus some reserves for unexpected expenses. They’ll want to see your savings accounts, checking accounts, and any investments you might have.

You’ll need to provide bank statements (usually the last two months) and investment account statements. Lenders want to “source” your funds – meaning they need to see where your down payment money came from to make sure it’s not borrowed money that would increase your debt load.

Gift funds from family members are perfectly acceptable for most loan programs, though you’ll need a gift letter from whoever is helping you out.

The median down payment in Texas is around $20,000, but manufactured home loans can require much less. Some programs need as little as 3.5% down, making that dream of homeownership much more achievable than you might think.

Types of Mortgages Available to Texans

Getting a mortgage in Texas opens up a world of financing options, especially when you’re considering manufactured homes. Each loan type has its own personality and purpose, designed to help different families achieve their homeownership dreams. Let’s explore the financing landscape together and find what might work best for your situation.

Manufactured Home Loans

Manufactured homes represent one of the smartest paths to affordable homeownership in Texas. These homes offer modern living at a fraction of traditional housing costs, and the financing options have evolved to match their quality and appeal.

Most manufactured home loans require a minimum credit score around 620, though we specialize in working with all credit types. We understand that everyone’s financial journey is different, and we’re here to help regardless of where you’re starting from.

Down payment requirements vary depending on your specific situation and the loan program you choose. The good news? We work with specialized financing programs that can accommodate different financial circumstances. If your down payment is less than 20% of the home’s value, you may need Private Mortgage Insurance (PMI), which protects the lender and allows you to move forward with less money down.

What makes manufactured home financing unique is the flexibility. These aren’t cookie-cutter loans – they’re designed specifically for the manufactured housing market. For detailed information about all your options, visit our Mobile Home Financing page.

FHA Loans for Manufactured Homes

FHA loans are like that reliable friend who’s always there when you need them. Backed by the Federal Housing Administration, these loans make homeownership accessible to families who might not qualify for conventional financing. They’re especially popular with first-time homebuyers and those building or rebuilding their credit.

FHA offers two distinct paths for manufactured home buyers:

FHA Title I Loans work well when you’re purchasing a manufactured home that isn’t permanently attached to land, or when you’re buying the home and land together. These loans have specific limits and terms, but they open doors for many families.

FHA Title II Loans are for manufactured homes that become real estate – permanently affixed to a foundation on land you own. This option treats your manufactured home just like a traditional house for financing purposes.

The beauty of FHA loans lies in their lower credit score requirements. With a credit score of 580, you can qualify with just a 3.5% down payment. Even if your score is as low as 500, you might still qualify with a 10% down payment – that’s pretty remarkable accessibility.

One thing to keep in mind is the Mortgage Insurance Premium (MIP). FHA loans require both upfront and annual mortgage insurance, regardless of your down payment amount. While this adds to your monthly cost, it’s often worth it for the easier qualification requirements and lower down payment options.

Specialized Manufactured Home Loans

Beyond traditional mortgage options, the manufactured housing world offers some creative financing solutions that might be perfect for your situation.

Chattel loans work more like car loans than traditional mortgages. They’re designed for manufactured homes that aren’t permanently attached to land. While they typically have shorter terms and higher interest rates than real estate mortgages, they can be an excellent option if you own your land separately or are leasing a lot.

Land-home packages solve a common challenge by combining the purchase of your manufactured home and the land into one convenient loan. This approach often results in better terms than trying to finance everything separately, and it definitely simplifies the process.

We take pride in offering specialized financing for all credit types. Whether you’re starting fresh, rebuilding after financial challenges, or have an established credit history, we have programs designed to work with your situation. Our team knows the manufactured housing market inside and out, and we’re experts at navigating these unique financing options.

To dive deeper into how we can help you secure financing, check out our comprehensive guide: Learn about manufactured home loans.

Here’s how these popular loan types compare:

Loan Type	Minimum Credit Score	Minimum Down Payment	Mortgage Insurance	Best For
Conventional	620	Varies	PMI if under 20% down	Buyers with good credit and stable income
FHA	580 (or 500 w/ 10% down)	3.5% (or 10% w/ 500 score)	Yes (Upfront & Annual)	First-time homebuyers, lower credit scores, new manufactured homes on owned land (Title II) or for home/lot purchases (Title I)
Chattel	Varies by lender	Typically 5-20%	Usually not required	Homes not permanently affixed to land, quicker approval process