Texas Home Down Payment: How Much Do You Need?
Buying a home in Texas is exciting, but figuring out how much money you need upfront can feel overwhelming.
Your minimum down payment may be as little as 0% to 3.5%, depending on the loan program, your qualifications and the property.
In this guide, I’ll explain the common down payment options, what affects your required amount and how to prepare for the other costs due at closing.
Key Takeaways
- Minimum Down Payment: Eligible borrowers may qualify for conventional financing with 3% down, FHA financing with 3.5% down or VA financing with 0% down.
- 20% Isn’t Required: Putting less than 20% down is common, although mortgage insurance or other program costs may apply.
- Cash Needed: Your down payment is separate from closing costs, prepaid expenses and reserve requirements.
- Assistance Options: Texas buyers may have access to down payment assistance based on income, location, purchase price and program guidelines.
- Planning Matters: The right amount depends on your complete financial scenario, not just the minimum allowed by a loan program.
At Larry Knopf (NMLS# 216620), I help buyers in Dallas-Fort Worth and throughout Texas compare loan options before they start making offers.
The goal is simple:
Know what you’ll need upfront, understand the monthly payment and have no surprises later.
Quick Answers About Texas Down Payments
- What is the lowest down payment available? Some eligible VA borrowers can purchase with 0% down. Conventional loans may allow 3% down, while FHA loans have a well-established 3.5% minimum.
- Do I have to put 20% down? No. A 20% down payment may eliminate conventional private mortgage insurance, but it isn’t required for most buyers.
- Can I use gift funds? Often, yes. Acceptable donors, documentation and minimum borrower contributions vary by loan program.
- Are closing costs part of the down payment? No. Closing costs and prepaid expenses are generally separate from your down payment.
- Can down payment assistance cover everything? It depends on the program. Assistance may cover part of the down payment or closing costs, but buyers still need to verify required funds and eligibility.
How Much Down Payment Do You Need in Texas?
Here’s the deal:
There isn’t one down payment requirement for every Texas homebuyer.
Your required down payment is determined by the loan program, occupancy, credit profile, debt-to-income ratio, available assets and property type.
A primary residence usually has more low-down-payment options than an investment property. A single-family home may also have different requirements than a condominium, manufactured home or multi-unit property.
The purchase price matters too.
Conforming loan limits vary by county. If the loan amount exceeds the applicable limit, jumbo financing may require a different down payment and reserve structure.
Down Payment Requirements by Loan Type
| Loan Type | Possible Minimum | Important Considerations |
|---|---|---|
| Conventional | As little as 3% | Eligibility, income limits and mortgage insurance depend on the specific program and borrower profile. |
| FHA | 3.5% for qualifying borrowers | Mortgage insurance applies, and the home must meet FHA property standards. |
| VA | 0% for eligible borrowers | Eligibility and entitlement must be verified. A VA funding fee may apply unless the borrower qualifies for an exemption. |
| USDA | 0% for eligible borrowers and properties | Household income and property location restrictions apply. |
| Jumbo | Varies by lender and scenario | Commonly requires stronger reserves, credit and documentation. |
These are general guidelines as of 2026. Loan requirements can change, and the minimum down payment doesn’t tell you the complete cost of the financing.
Conventional Loans
Some conventional programs allow qualified buyers to purchase a primary residence with 3% down.
But not every 3% down program works the same way.
Some are limited to first-time buyers. Others may have income restrictions or property requirements. If you put less than 20% down, private mortgage insurance will commonly be required.
The PMI payment can vary significantly based on your credit, loan-to-value ratio, loan structure and insurer.
That’s why I don’t look at the interest rate alone.
I look at the down payment, monthly mortgage insurance, lender costs, total payment and cash due at closing.
FHA Loans
An FHA home loan may allow a 3.5% down payment for borrowers who meet the applicable credit and underwriting requirements.
FHA loans can be useful when a conventional loan isn’t the right fit. They may offer more flexibility in certain credit and debt-to-income scenarios.
FHA financing includes mortgage insurance. The cost is based on the loan structure and current guidelines, so it should be included when comparing the monthly payment.
VA Loans
Eligible service members, veterans and certain surviving spouses may qualify for VA financing with no down payment.
That doesn’t always mean no money is needed at closing.
The buyer may still have closing costs, prepaid taxes, homeowners insurance and other required expenses. Seller credits may help with eligible costs, subject to the contract, appraisal and VA guidelines.
Do You Save Money by Putting 20% Down?
A 20% down payment can eliminate private mortgage insurance on a conventional loan.
But that doesn’t automatically make it the right decision.
Putting more money down may reduce your loan amount and monthly payment. It may also leave you with less cash after closing.
And that matters.
Homeownership can come with moving costs, repairs, furnishings and other expenses. Some borrowers prefer to keep additional money available instead of putting every possible dollar into the property.
Let’s run the numbers.
I’d compare several options, such as:
- A minimum-down-payment option
- A moderate down payment
- A 20% down payment
- The monthly mortgage insurance for each applicable option
- The estimated cash remaining after closing
The better option is the one that fits your payment comfort, available funds and broader financial plan.
What Else Do You Pay at Closing?
The down payment is only one part of your cash needed to close.
You may also need money for:
- Lender and third-party closing costs
- Title-related charges
- Appraisal and inspection expenses
- Prepaid homeowners insurance
- Initial property tax and insurance escrow deposits
- Homeowners association charges, when applicable
- Required financial reserves after closing
Fees vary by lender, property, location and loan program. Current rates also affect available lender-credit options.
A seller may agree to pay some eligible closing costs. The amount allowed depends on the loan program, occupancy, down payment and negotiated sales contract.
Seller credits generally cannot be used to cover the buyer’s required down payment.
Can Texas Down Payment Assistance Help?
Texas has state, local and other assistance programs that may help eligible buyers with down payment or closing costs.
These programs commonly have requirements involving:
- Household income
- Purchase price
- Property location
- Credit qualifications
- Homebuyer education
- Occupancy
- Use of an approved loan program or participating lender
Assistance can come in different forms.
Some programs provide a grant. Others use a second lien that may be repayable, deferred or forgivable after specific conditions are met.
That distinction is important.
Before choosing assistance, I’d compare the interest rate, repayment terms, total monthly payment and future refinance or sale restrictions. You can also review low down payment purchase options to see the types of financing that may be available.
How Your Financial Profile Affects the Down Payment
The published minimum isn’t necessarily the down payment an underwriter will require for every borrower.
Credit Profile
Credit can affect loan eligibility, pricing and mortgage insurance.
A borrower may technically meet a program’s minimum credit requirement but receive a better overall structure by improving credit or increasing the down payment. The answer depends on the complete loan file.
Debt-to-Income Ratio
Your debt-to-income ratio compares qualifying monthly obligations with qualifying income.
If the projected housing payment pushes that ratio beyond program guidelines, a larger down payment may reduce the loan amount and monthly payment.
Employment and Income Documentation
Salaried, hourly, commission and self-employed income can all be evaluated differently.
For self-employed borrowers, the income used for mortgage qualification may not match gross business revenue. Tax returns, business documents and other records may be reviewed depending on the program.
A larger down payment doesn’t replace the need to document sufficient qualifying income.
Property Type and Occupancy
Primary residences usually offer the lowest down payment options.
Second homes and investment properties commonly require more money down. Condominiums, multi-unit properties and manufactured homes may also have additional eligibility requirements.
How to Choose the Right Down Payment
Start with the minimum.
Then look beyond it.
- Confirm your eligible loan programs. Compare conventional, FHA, VA and any applicable assistance options.
- Estimate the complete cash requirement. Include the down payment, closing costs, prepaid expenses and reserves.
- Compare monthly payments. Review principal, interest, property taxes, homeowners insurance, mortgage insurance and association dues.
- Protect your remaining savings. Consider how much money you want available after closing.
- Review multiple structures. A small change in down payment can affect pricing, mortgage insurance and cash needs.
Getting pre-approved early can make this much easier.
It gives you time to review the numbers before you’re under contract and facing important deadlines.
Ready to Review Your Texas Homebuying Plan?
If you’re buying your first home, moving into another property or qualifying with self-employed income, I’m happy to review the scenario with you.
We can compare loan programs, down payment choices, estimated closing costs and monthly payments.
Call, text or email me to discuss your plans in Dallas-Fort Worth or elsewhere in Texas. I’m also licensed in Delaware.
Sometimes a short pre-approval conversation is all it takes to get a much clearer picture of what you’ll need.
Frequently Asked Questions
Does earnest money count toward my down payment?
Earnest money is generally credited toward the amount you owe at closing after allowable adjustments. Your lender will need to document the payment and verify the source of funds according to the loan program.
Does Texas down payment assistance have to be repaid?
It depends on the specific assistance program. Some assistance may be structured as a grant, while other programs use repayable, deferred or conditionally forgivable second liens.
Do self-employed buyers need a larger down payment?
Not automatically. The required down payment depends on the selected loan program and complete financial profile, although documenting qualifying income can be more detailed for a self-employed borrower.
Can I use proceeds from selling my current home for the down payment?
Yes, proceeds from a completed sale can commonly be used if they are properly documented. If the sale will occur after the new purchase, additional financing or qualification planning may be needed.
What happens if the home appraises below the purchase price?
The lender generally bases financing on the lower of the purchase price or appraised value. A low appraisal may require renegotiation, a different loan structure or additional buyer funds, depending on the contract and loan guidelines.
This is educational and not financial advice. Loan programs and guidelines can change. Talk with a licensed mortgage professional about your specific scenario.
Larry Knopf
Larry has helped over 4000 families with first-time buyer programs, self-employed scenarios and Buy Before You Sell
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