If you’re house hunting in Texas, you’ve probably heard the “you need 20% down” line. Helpful? Sometimes. Accurate for every buyer? Not even close. The truth is: many Texas homebuyers—especially first-time buyers—use down payment options that are far below 20% and still become happy homeowners. The key is picking the right path for your budget, goals, and timeline.

1) Conventional Loans: 3%–5% Down

A conventional mortgage is a popular choice for buyers with solid credit and stable income. Many programs allow 3% down for first-time homebuyers and 5% down for repeat buyers. You may pay private mortgage insurance (PMI) with a smaller down payment, but PMI can often be removed later once you reach enough equity—hello, future-you high five.

2) FHA Loans: 3.5% Down

An FHA loan is known for more flexible credit guidelines and a lower down payment requirement (typically 3.5%). This can be a strong option for buyers who want a manageable entry point into the Texas housing market. Keep in mind: FHA loans include mortgage insurance, which may last longer than PMI on conventional loans.

3) VA Loans: 0% Down for Eligible Buyers

If you’re a veteran, active-duty service member, or eligible surviving spouse, a VA home loan in Texas may offer zero down payment with competitive interest rates and no monthly mortgage insurance. VA loans can be one of the most powerful home financing tools available—truly a “why would you not?” option if you qualify.

4) USDA Loans: 0% Down in Eligible Areas

Buying outside the city core? A USDA loan may offer 0% down for eligible rural and suburban areas. Parts of Central Texas can qualify depending on location and household income.

5) Down Payment Assistance (DPA) Programs in Texas

Many buyers qualify for Texas down payment assistance through state, local, or nonprofit programs. These can come as grants or forgivable/low-interest second loans that help cover down payment and sometimes closing costs.

6) Gift Funds & Seller Concessions

Some loans allow gifted down payment funds from family, and in certain scenarios, seller concessions can help reduce upfront costs (especially helpful in a slower market).

Bottom line: You don’t need a 20% down payment to buy a home in Texas—you need a smart plan. If you want help comparing loan options, down payment assistance programs, and monthly payment scenarios, I’m happy to map out a few paths that fit your goals (and keep your savings account from panicking).