What Do You Need to Buy Your First House in Texas? Checklist

Buying your first home is one of the biggest financial decisions you'll ever make — and in Texas, the process has some unique steps that catch plenty of first-timers off guard. Whether you're putting down roots in Austin, Round Rock, or anywhere across the Lone Star State, having a clear checklist can mean the difference between a smooth closing and a stressful surprise.

This guide walks you through everything you need to buy your first house in Texas, organized by the order you'll actually tackle each step. No fluff — just the documents, numbers, and decisions you need to make.

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Step 1: Know If You Qualify as a First-Time Homebuyer in Texas

In Texas, you're considered a first-time homebuyer if you have not owned a home as your primary residence in the past three years. This definition matters because it unlocks access to down payment assistance programs, grants, and specialized loan options through the Texas State Affordable Housing Corporation (TSAHC) and other state programs.

A few exceptions apply:

• Veterans are eligible even if they've owned a home before
• Buyers purchasing in targeted areas (designated census tracts) may bypass the first-time requirement
• If you're a single parent who only owned a home with a former spouse, you may still qualify

Source: TSAHC defines first-time homebuyer status at tsahc.org. CalcLogix's 2026 guide confirms the three-year rule applies statewide.

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Step 2: Check Your Credit Score

Your credit score determines which loan programs you qualify for and how much you'll pay in interest over the life of your mortgage. Here's what you need to know for 2026:

Loan Type	Minimum Credit Score	Down Payment
FHA Loan	580 (for 3.5% down)	3.5%
FHA Loan	500–579	10%
Conventional	620+	3%–5%
TSAHC Programs	620	Varies by program
VA Loan	No official minimum (lenders typically require 580–620)	0%
USDA Loan	640+	0%

If your score is below 580, you can still get an FHA loan — but you'll need to put down 10% instead of 3.5%. Most lenders set their own overlays above the FHA floor, so shop around.

What to do:

• Pull your credit report from all three bureaus at AnnualCreditReport.com (free, weekly through 2026)
• Dispute any errors you find
• Pay down credit card balances to lower your utilization ratio
• Avoid opening new credit lines or taking on new debt before closing

Sources: FHA.com (2026 FHA Loan Requirements), AmeriSave (FHA Loan Requirements 2026), TexasLending (TSAHC program requirements).

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Step 3: Save for Your Down Payment and Closing Costs

Down Payment

The myth that you need 20% down is just that — a myth. In Texas, you can buy a home with as little as 0% down (VA and USDA loans) or 3.5% down (FHA loan with a 580+ credit score). Conventional loans start at 3% down for qualified first-time buyers.

On a $450,000 home in the Austin metro (close to the city's July 2026 median of approximately $577,000 within Austin city limits, per KXAN and the Engineers and Architects Association), here's what that looks like:

Down Payment %	Amount on $450,000 Home
3% (Conventional)	$13,500
3.5% (FHA)	$15,750
5% (Conventional)	$22,500
10% (FHA, credit 500–579)	$45,000
20% (No PMI)	$90,000

Closing Costs

In Texas, buyer closing costs typically run 2% to 5% of the purchase price, separate from your down payment. According to Rocket Mortgage's 2026 data, the average closing cost in Texas is about 0.93% of the sale price when including recording fees and taxes — below the national average of 1.06%. However, that figure represents lender fees only; the full picture including prepaid escrow, title insurance, and inspection costs brings the total to the 2%–5% range.

On that same $450,000 home, expect to pay between $9,000 and $22,500 in closing costs on top of your down payment.

Down Payment Assistance in Texas

If saving for a down payment feels overwhelming, Texas offers several assistance programs:

• TSAHC Home Sweet Texas Home Loan Program: Provides down payment assistance grants up to 5% of the loan amount, available statewide to qualifying buyers
• My First Texas Home (TDHCA): Offers down payment and closing cost assistance for first-time buyers
• Homeownership Across Texas: A mortgage credit certificate (MCC) program that provides a federal tax credit

Sources: Rocket Mortgage (January 2026), iBuyer (May 2026), LRG Realty (August 2026), Neuhaus Realty (April 2026), TSAHC.org.

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Step 4: Get Pre-Approved for a Mortgage

A pre-approval letter tells sellers you're serious and financially ready. In a market like Austin — where the July 2026 median sale price within the city was approximately $577,000 according to KXAN — a pre-approval can give you an edge when competing with other buyers.

Documents You'll Need for Pre-Approval

Gather these before contacting lenders:

• Valid government-issued ID (driver's license, passport, or state ID)
• Social Security card (or ITIN if you're using an ITIN loan)
• Proof of income: Last 2 years of W-2s or 1099s, plus your most recent 30 days of pay stubs
• Tax returns: Last 2 years of federal returns (all schedules)
• Bank statements: Last 2 months of all accounts (checking, savings, investment)
• Employment verification: Lender will confirm with your employer directly
• Explanation letter for any large deposits or credit blemishes
• Divorce decree or child support orders, if applicable (for income/debt calculation)

If you're self-employed, expect additional scrutiny: lenders typically want to see 2 years of stable self-employment income, business tax returns, and may request a year-to-date profit and loss statement.

Source: LRG Realty (August 2026, "First Time Buyer Document Checklist Texas").

What Lenders Look At

Your lender will evaluate three key numbers:

1. Credit score — as covered above
2. Debt-to-income ratio (DTI) — most loans require a maximum DTI of 43%, though some FHA lenders allow up to 50% with compensating factors. Your DTI includes your new mortgage payment plus all monthly debts (car loans, student loans, credit card minimums, child support).
3. Employment history — generally 2 years in the same field. If you just started a new job, you can still qualify as long as it's in the same industry and you have a 2-year work history overall.

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Step 5: Complete a Homebuyer Education Course

If you're using any TSAHC or TDHCA program — or many down payment assistance programs — completing a homebuyer education course is mandatory before closing. Even if it's not required for your specific loan, it's worth the time.

The good news: many courses are free or low-cost ($50–$100) and available online.

Approved Providers

TSAHC accepts courses from providers listed on the Texas Financial Toolbox (texasfinancialtoolbox.com). One popular free option is Freddie Mac's "Credit Smart Homebuyer U", available in both English and Spanish.

The certificate is typically valid for 12 to 24 months, so you can complete this early in the process.

Sources: TSAHC.org (Home Buyer Education), TSAHC Knowledgebase (Lender Guidelines), AskDoss (July 2026), The Mortgage Reports (May 2026).

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Step 6: Find a Real Estate Agent

In Texas, you are not legally required to use a real estate agent — but having one costs you nothing as a buyer (the seller pays the commission). A good buyer's agent will:

• Help you find homes that match your budget and needs
• Navigate the Texas-specific contract forms (TREC forms)
• Negotiate price, repairs, and seller concessions
• Guide you through the option period (more on that below)
• Coordinate with your lender and title company

Look for an agent who knows your target area. If you're a Spanish speaker, working with a bilingual realtor ensures nothing gets lost in translation during the most important financial transaction of your life.

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Step 7: Go House Hunting (and Know the Numbers)

Before you start touring homes, know what you can actually afford. A common rule of thumb is the 28/36 rule: spend no more than 28% of your gross monthly income on housing (including principal, interest, taxes, and insurance), and no more than 36% on all debt combined.

Austin Metro Price Snapshot (July 2026)

The Austin metro offers a wide range of price points depending on how far from the city core you're willing to live:

Area	Median Price (July 2026)	Source
City of Austin	~$577,000	KXAN / EAA
Travis County	$520,000	CultureMap Austin
Austin metro (5-county)	~$435,000	The Real Deal
Redfin (3-mo median, Austin)	$557,000	Redfin
Zillow avg home value	$504,148	Zillow
Caldwell County (lowest)	$254,000	KXAN

For first-time buyers, looking at the outer metro — Round Rock, Cedar Park, Pflugerville, Kyle, Buda, or Hutto — can mean significantly lower prices while still being within a 30–45 minute commute of downtown Austin.

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Step 8: Make an Offer (and Use the Option Period)

Texas real estate contracts have a unique feature: the option period. When you make an offer, you can include an option fee (typically $100–$500, paid to the seller) that buys you the right to terminate the contract for any reason during a negotiated period (usually 7–14 days).

This is your safety net. During the option period, you'll:

1. Get a home inspection — In Texas, inspections are technically optional but strongly recommended. Expect to pay $400–$600 for a standard inspection.
2. Negotiate repairs — If the inspection reveals issues, you can ask the seller to fix them, offer a credit, or walk away.
3. Shop for homeowners insurance — Texas has some of the highest homeowners insurance premiums in the country due to windstorm and hail risk. Get quotes from at least 3 carriers.
4. Finalize your loan — Your lender will order the appraisal during this time.

If you decide the home isn't right, you lose the option fee — but you get your earnest money back and walk away clean.

Source: TREC (Texas Real Estate Commission) contract forms.

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Step 9: Get a Home Inspection

Texas does not require a home inspection, but skipping one is one of the costliest mistakes a first-time buyer can make. A licensed inspector will evaluate the home's structure, roof, foundation, plumbing, electrical, HVAC, and appliances.

Texas-Specific Concerns

• Foundation issues: Texas clay soil expands and contracts with moisture changes, making foundation problems common. Look for cracks in walls, sticky doors, and uneven floors.
• Roof condition: Texas weather (hail, high winds) takes a toll on roofs. Ask about the roof's age and material.
• HVAC age: Central Texas summers demand reliable air conditioning. An aging system can mean a $5,000–$10,000 replacement.
• Termites: Get a separate termite inspection (WDIR — Wood Destroying Insect Report). Subterranean termites are active across Texas.

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Step 10: Close on Your New Home

Closing day in Texas typically happens at a title company (not an attorney's office, as in some states). Here's what to bring and what to expect:

What to Bring to Closing

• Valid government-issued photo ID
• Certified or cashier's check for your closing costs and down payment (if not wire-transferred in advance)
• Proof of homeowners insurance (your lender will need this before funding)
• Any documents your lender requested at the last minute

What Happens at Closing

1. You'll sign the loan documents (promissory note, deed of trust)
2. The title company will record the deed with the county
3. You'll receive the keys to your new home
4. The seller pays the commission to both agents
5. Your lender funds the loan

What You'll Pay

At closing, you'll pay your down payment plus closing costs (the 2%–5% we covered earlier). You'll also prepay some items: property taxes (Texas has no state income tax, but property taxes are among the highest in the nation), homeowners insurance premiums, and interest from closing day to the end of the month.

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Quick Reference: Complete First-Time Buyer Checklist

Here's a printable summary of everything you need:

Financial Documents

• 2 years of tax returns (all schedules)
• 2 years of W-2s or 1099s
• 30 days of recent pay stubs
• 2 months of bank statements (all accounts)
• Valid government-issued ID
• Social Security card or ITIN
• Explanation letters for large deposits or credit gaps

Credit and Loan

• Credit report pulled and reviewed
• Credit score above your loan program's minimum
• Disputes filed for any errors
• Pre-approval letter from a lender
• Loan type selected (FHA, Conventional, VA, USDA, or ITIN)

Savings

• Down payment saved (3%–20% depending on loan type)
• Closing costs budgeted (2%–5% of purchase price)
• Emergency fund separate from home purchase funds

Education and Assistance

• Homebuyer education course completed (if required)
• Down payment assistance programs researched
• TSAHC eligibility checked at tsahc.org

Home Search and Offer

• Real estate agent selected
• Target neighborhoods identified
• Budget determined (using 28/36 rule)
• Offer made with TREC contract
• Option fee paid and option period negotiated

Due Diligence

• Home inspection scheduled and completed
• Termite inspection (WDIR) ordered
• Homeowners insurance quotes obtained
• Appraisal ordered by lender
• Repair negotiations completed (if needed)

Closing

• Closing disclosure reviewed (at least 3 days before closing)
• Closing costs payment prepared (wire or cashier's check)
• Proof of insurance delivered to lender
• Final walk-through scheduled (24–48 hours before closing)
• ID and documents brought to title company

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Frequently Asked Questions

Can I buy a house in Texas without a Social Security Number?

Yes. ITIN loans allow borrowers with an Individual Taxpayer Identification Number to purchase a home. These loans typically require a larger down payment (15%–20%) and have different credit qualification methods, but they're a legitimate path to homeownership for non-citizens.

Do I need 20% down to buy a house in Texas?

No. You can buy with as little as 0% down (VA or USDA) or 3%–3.5% down (conventional or FHA). Putting 20% down eliminates private mortgage insurance (PMI), but it's not a requirement for most loan programs.

How long does the home-buying process take in Texas?

From pre-approval to closing, expect 30 to 60 days once you've found a home. The pre-approval process itself takes 1–2 weeks, and house hunting can take weeks or months depending on your market and criteria.

Are property taxes high in Texas?

Yes — Texas has some of the highest property taxes in the nation, with an average effective rate of approximately 1.4%–1.8% of assessed home value, varying by county and school district. There is no state income tax, which partially offsets this. Factor property taxes into your monthly budget when calculating affordability.

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Final Thoughts

Buying your first home in Texas doesn't require perfect credit or a massive savings account — but it does require preparation. The buyers who succeed are the ones who show up with documents in hand, know their numbers, and understand the Texas-specific steps like the option period and title company closing.

Start with the checklist above, work through each step in order, and don't be afraid to ask questions. Your future home is worth the effort.

Ready to start your homebuying journey in the Austin area? The team at Sully Realty Group is here to help. Contact us for a free consultation with a bilingual agent who can guide you through every step of the process.

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Sources

• TSAHC — First-Time Home Buyer Grants & Programs
• FHA.com — FHA Loan Requirements 2026
• Rocket Mortgage — Average Closing Costs in Texas (January 2026)
• Redfin — Austin Housing Market Data (July 2026)
• KXAN — Texas Housing Data: Austin Market
• TREC — Texas Real Estate Commission Contract Forms
• The Mortgage Reports — Texas First-Time Home Buyer Programs (May 2026)