Home Loan Types Available to Houston Buyers

There’s no single “best” mortgage — the right loan depends on your credit, your savings, your service history, and where you’re buying. Here are the main options, with current 2026 figures for the Houston area. Every number below is a guideline; your lender will give you exact figures for your situation.

FHA Loans — Lower Down Payment, Flexible Credit

Backed by the Federal Housing Administration, FHA loans are built for buyers who have limited savings or a thinner credit history. They allow a down payment as low as 3.5% with a credit score of 580 or higher. The trade-off is mortgage insurance (see MIP below): an upfront premium of 1.75% of the loan plus an annual premium — usually about 0.55% — that’s now generally paid for the life of the loan on low-down-payment FHA mortgages. For 2026, the FHA loan limit for a single-family home in Harris County is $541,287.

VA Loans — Zero Down for Veterans & Service Members

If you’ve served, a VA loan is one of the strongest products on the market: 0% down, no monthly mortgage insurance, and competitive rates. There is a one-time VA funding fee — 2.15% of the loan for most first-time uses with no down payment — but it’s waived entirely for veterans receiving VA disability compensation and certain other groups. Houston is home to one of the largest veteran communities in the country, and I work with VA-experienced lenders who close these loans smoothly. You can confirm your eligibility through the U.S. Department of Veterans Affairs.

“I used a VA Home Loan which Kevan was extremely knowledgeable of… truly the best at his job.”

Conventional Loans — The Flexible Standard

Conventional loans aren’t government-insured and are the most common path for buyers with steady credit. Down payments start at 3% for some first-time-buyer programs and 5% for most buyers; put down 20% and you skip private mortgage insurance (PMI) entirely. For 2026, the conforming loan limit in Harris County is $832,750 — borrow above that and you’re in jumbo-loan territory.

USDA Loans — Zero Down in Outlying Areas

USDA loans offer 0% down for buyers in eligible rural and outer-suburban areas — and more of the Houston metro’s edges qualify than most people expect, including parts of Waller, Montgomery, and Brazoria counties. There are household income limits, and the property has to fall inside a USDA-eligible boundary. If you’re open to the outskirts, it’s worth checking.

Jumbo Loans — Above the Conforming Limit

A jumbo loan is any mortgage above the 2026 Harris County conforming limit of $832,750. Because lenders can’t sell these loans to Fannie Mae or Freddie Mac, they carry stricter requirements — typically a higher credit score, larger down payment, and more cash reserves. They’re common in Houston’s higher-priced neighborhoods and in the move-up market.

Hard Money & Specialty Loans

Hard money loans are short-term, asset-based loans for properties or buyers that don’t fit standard lending guidelines — often investors, flippers, or unusual properties. Rates are higher and terms are shorter, so they’re a tool for specific situations rather than a typical home purchase. If you’re investing, I can point you to the right lenders.

Pre-Qualification vs. Pre-Approval

One of the very first steps in buying a home is getting a letter from a lender — and there are two kinds. They sound similar but carry very different weight with sellers.

• Pre-qualification is a quick estimate based on information you tell the lender. It’s a useful starting point, but nothing is verified.
• Pre-approval goes further: the lender pulls your credit and verifies your income and the funds you have for a down payment and closing costs. It’s a much stronger signal — and in the Houston market, most sellers won’t seriously consider a financed offer without one.

My advice is simple: get pre-approved before we start touring homes. It tells you exactly what you can afford, makes your offer competitive, and spares you the heartbreak of finding the right home only to learn it’s out of reach. There’s nothing worse than falling for a house that isn’t in your range.

How Your Mortgage Fits the Home-Buying Timeline

Financing runs alongside the home search from start to finish. Here’s how the loan side unfolds:

Estimate Your Monthly Payment

Your monthly mortgage payment is made up of principal and interest. If your down payment is under 20%, your lender will also collect property taxes and homeowner’s insurance in an escrow account and fold them into your monthly bill — which matters in the Houston area, where property taxes run higher than the national average.

As a quick rule of thumb, every $100,000 you borrow at a 6.5% rate on a 30-year loan runs about $630 a month in principal and interest, before taxes and insurance. For a precise figure built around your price, down payment, rate, and Houston-area tax rate — including PMI or MIP — I’ll have one of my vetted lenders run the numbers, often the same day.

Quick Answers

A few questions buyers ask me most about financing. For the full library — loan programs, credit, closing costs, escrow, and Houston-specific terms — see the Mortgage Loan FAQ.

How much do I need for a down payment in Houston?

It depends on your loan:

• VA and USDA loans: 0% down for qualified buyers
• FHA loans: 3.5% down with a 580+ credit score
• Conventional loans: 3%–5% to start; 20% to skip PMI
• Down payment assistance: can cover part or all of it for eligible buyers

I’ll connect you with a lender who can run your exact numbers.

What credit score do I need to buy a home?

FHA loans can work with scores as low as 580 (sometimes 500 with a larger down payment). Conventional loans generally want 620 or higher, and the best rates go to scores in the 740+ range. A lower score doesn’t mean no — it usually means a different loan or a few months of preparation.

What’s the difference between pre-qualification and pre-approval?

Pre-qualification is a quick, unverified estimate. Pre-approval means the lender has pulled your credit and verified your income and funds — it carries real weight with Houston sellers, and you’ll want one before touring homes.

More questions? Read the full Mortgage Loan FAQ →