How Much Down Payment Do You Really Need in Texas in 2026?
Texas homes sold for a median price of $343,779 in May 2026, up 0.9 percent from a year earlier according to Redfin. Type “how much down payment do I need” into a search bar and you will find answers ranging from zero to 20 percent, and somehow all of them are technically correct. I am Anthony Ferrando, a mortgage loan originator licensed across Texas, and this question comes up in almost every first conversation I have with a buyer. So instead of another abstract explainer, this post answers the exact questions people actually search, with real dollar figures at real Texas price points.
The stakes are simple. If you believe you need more cash than you actually do, you may rent for years longer than necessary. If you put down more than you should, you may drain the savings a lender wants to see left over after closing. Both mistakes are avoidable with a little math.
Key points:
- Minimum down payments in Texas: 0% for VA-eligible buyers, 3% on many conventional loans, 3.5% for FHA with a 580+ credit score.
- On a $340,000 home, that means roughly $10,200 (3%) to $11,900 (3.5%) at the low end, not $68,000.
- The 20 percent figure only marks the point where private mortgage insurance (PMI) drops off a conventional loan. It has never been a minimum.
- Closing costs are separate from your down payment. Budget roughly 2 to 4 percent of the price on top.
- Gift funds from family can cover part or all of your down payment on conventional and FHA loans, with the right paperwork.
- All figures are illustrative and subject to credit, income, and property qualifications.
What is the minimum down payment for a house in Texas?
The minimum down payment in Texas is 0 percent for eligible veterans and service members using a VA loan, 3 percent for many conventional loan programs, and 3.5 percent for an FHA loan with a credit score of 580 or higher. There is no Texas-specific rule that raises these floors; the minimums come from the loan program, not the state.
A few details matter inside those numbers. The 3 percent conventional floor generally applies through programs like Conventional 97, HomeReady, and Home Possible, some of which carry income limits. I broke those down in my recent post on HomeReady and Home Possible in Texas. Standard conventional pricing without those programs typically starts at 5 percent down.
On the FHA side, the 3.5 percent minimum requires a 580 credit score. Between 500 and 579 the minimum jumps to 10 percent, though in practice most lenders want to see stronger credit than the bare FHA floor.
How much is the down payment on a $340,000 house in Texas?
On a $340,000 home, close to the current statewide median, the down payment ranges from $0 with a VA loan to $68,000 at 20 percent. The most common entry points are $10,200 at 3 percent and $11,900 at 3.5 percent. Here is the full range:
| Down payment | Cash required | Loan amount | Mortgage insurance? |
|---|---|---|---|
| 0% (VA, eligible buyers) | $0 | $340,000 | None (VA funding fee applies) |
| 3% (conventional programs) | $10,200 | $329,800 | PMI until ~20% equity |
| 3.5% (FHA, 580+ score) | $11,900 | $328,100 | FHA MIP, plus upfront premium |
| 5% (standard conventional) | $17,000 | $323,000 | PMI until ~20% equity |
| 10% | $34,000 | $306,000 | PMI, at a lower rate |
| 20% | $68,000 | $272,000 | None |
Statewide medians hide a lot of local range. The same math on a $254,000 El Paso home starts around $7,620 at 3 percent, while a $452,000 Austin-area home starts around $13,560. You can see how prices and inventory are trending across the state on my Texas housing market page, which I update as new data comes out.
Do you have to put 20% down to buy a house in Texas?
No. Twenty percent down has never been a requirement for conventional, FHA, or VA financing. It is the point where a conventional loan no longer needs private mortgage insurance, which is money worth saving but a separate question from whether you can buy at all.
In my own pipeline, and in what we see at Mortgage Austin, most first-time buyers close with something between 3 and 5 percent down, and move-up buyers often land near 10 to 20 percent because they bring equity from a prior sale. PMI on a strong file is often far cheaper than buyers expect, and it does not last forever. Once you reach roughly 20 percent equity you can request removal, and it terminates automatically at 22 percent under federal rules.
Waiting years to save the full 20 percent carries its own cost. If prices in your market rise while you save, the target moves. If they soften, the equation changes again. The honest answer is to run both versions of the math with current numbers instead of treating 20 percent as a finish line.
Where can your down payment money come from?
Lenders accept down payment funds from more sources than most buyers realize: your own savings, gift funds from family, proceeds from selling assets, retirement account loans, and for qualifying buyers, down payment assistance through TSAHC. Every source needs a paper trail showing where the money came from.
Gift funds are the big one. A parent or relative can cover part or even all of your down payment on conventional and FHA loans, provided the gift is documented with a signed letter and the transfer is traceable. I covered the loan-by-loan rules in my post on gift funds for a Texas mortgage.
For buyers who qualify by income and profession, the Texas State Affordable Housing Corporation offers down payment assistance that pairs with a conventional or FHA first mortgage. I wrote about how the statewide program works in my TSAHC Home Sweet Texas post. One caution: seller concessions can cover closing costs, but they cannot fund your down payment on any major loan program.
Is a bigger down payment always better?
Not always. A larger down payment lowers your monthly payment and can improve your rate pricing, but draining every dollar of savings to get there can hurt your approval and leave you exposed after closing. Underwriters like to see reserves, meaning money left in the bank after the deal closes.
Three things improve as your down payment grows. Your loan amount shrinks, PMI gets cheaper and eventually disappears at 20 percent, and conventional pricing adjustments generally ease at higher equity tiers, which may help your rate. Those are real benefits, and for buyers with plenty of cash, they usually win.
The counterweight is flexibility. New homeowners face inspections that missed something, first-year repairs, and moving costs. A buyer who puts 10 percent down and keeps six months of expenses in reserve is often in a stronger position, on paper and in real life, than one who scraped to 20 percent with nothing left. There is no single right answer, only the version of the math that fits your income, savings, and timeline.
Frequently Asked Questions
Can I buy a house in Texas with no money down?
Yes, if you are an eligible veteran, active-duty service member, or qualifying surviving spouse using a VA loan, which allows 0 percent down. For most other buyers the practical floor is 3 percent on conventional programs or 3.5 percent on FHA. Approval is subject to credit, income, and property qualifications.
How much down payment do I need for a $250,000 house in Texas?
At 3 percent down you would need $7,500, and at 3.5 percent for FHA you would need $8,750. A 20 percent down payment on the same house is $50,000. Remember to budget another 2 to 4 percent of the price, roughly $5,000 to $10,000, for closing costs.
Does my down payment include closing costs?
No. Closing costs are a separate expense covering items like title insurance, appraisal, lender fees, and prepaid taxes and insurance. In Texas they often run 2 to 4 percent of the purchase price. Seller concessions and lender credits can offset closing costs, but they cannot be used as your down payment.
Can my whole down payment be a gift from family?
Often, yes. FHA allows the full down payment to come from an acceptable donor, and conventional loans allow it on owner-occupied homes, with 100 percent gift funds permitted in most one-unit scenarios. The gift needs a signed gift letter and a documented transfer, and it cannot be a loan in disguise.
Will a bigger down payment get me a lower interest rate?
It may. Conventional loan pricing includes adjustments tied to your equity and credit score, so moving from 3 percent down to 10 or 20 percent can improve the rate you are offered. The effect varies by scenario, and rates change daily, so the only reliable way to know is a side-by-side quote on your actual file.
How much do most first-time buyers in Texas actually put down?
Most first-time buyers I work with put down between 3 and 5 percent, using conventional 3 percent programs or FHA at 3.5 percent. Buyers selling a previous home usually put down more because they roll equity forward. The right number depends on your savings, your monthly budget, and how much cushion you want after closing.
If you are trying to figure out the down payment number that fits your situation, reach out and let’s talk through your options. We will run the actual math on your price range, your savings, and the programs you qualify for. No pressure, just clarity.
Anthony Ferrando | Mortgage Loan Originator | NMLS# 1919613 | Ferrando Financial LLC NMLS# 2403080 | Licensed in Texas. This is not a commitment to lend. Loan approval is subject to credit, income, and property qualifications. Down payment minimums, mortgage insurance terms, and program eligibility vary by loan type and are subject to change; figures shown are illustrative examples, not a quote or offer of credit. Median price data: Redfin, Texas housing market, May 2026. Equal Housing Lender.
