The Best Mortgage Options for First-Time Homebuyers in Texas

By Megan Bludau — Top Mortgage Originator in the Greater Houston Area

Buying your first home is exciting… and let’s be honest, a little overwhelming.

Between down payment myths, credit score fears, and confusing online advice, many first-time buyers assume homeownership is farther away than it really is.

The truth? Texas offers several strong mortgage options specifically designed to help first-time buyers get into a home sooner — and smarter.

Let’s break down the best mortgage options for first-time homebuyers in Texas and how to choose the one that fits your situation.

First Things First: What Counts as a “First-Time Homebuyer”?

In most cases, you’re considered a first-time homebuyer if:

• You haven’t owned a home in the last three years, or

• You’re purchasing your first primary residence

  
  

This definition matters because it can open the door to more flexible loan programs and down payment options.

1. FHA Loans — A Popular Starting Point

Best for: buyers with lower credit scores or smaller down payments.

FHA loans allow:

• As little as a 3.5% down payment

• More flexible credit guidelines

• Higher allowable debt-to-income ratios

  
  

This makes FHA one of the most accessible loan programs for first-time buyers in Texas.

👉 Related read: What Is An FHA Loan (And Who Qualifies)?

2. Conventional 3% Down Loans

Best for: buyers with stronger credit who want lower long-term costs.

Many first-time buyers are surprised to learn that:

• You don’t need 20% down

• Conventional loans for first time homebuyers only allow just 3% down

• Mortgage insurance can often be removed later

  
  

Over time, conventional loans can be more cost-effective than FHA — especially if your credit profile is strong.

3. Texas Down Payment Assistance Programs

Best for: buyers who qualify based on income and purchase price limits.

Texas offers several down payment assistance (DPA) options that may help cover:

• down payment

• closing costs

• or both

  
  

These programs can be powerful tools — but they aren’t one-size-fits-all. Each comes with specific guidelines, income caps, and long-term considerations.

This is where having an experienced local lender truly matters.

4. USDA Loans (Zero Down in Eligible Areas)

Best for: buyers purchasing in qualifying suburban or semi-rural areas.

USDA loans offer:

• 0% down payment

• Lower mortgage insurance than FHA

• Competitive interest rates

  
  

Many buyers don’t realize how many Texas areas qualify — including parts of Montgomery, Waller, and surrounding counties. Be careful though, USDA loans have tight debt-to-income restrictions. Always be sure to work with a knowledgeable and local lender to avoid mistakes down the road.

5. VA Loans (For Eligible Buyers)

If you’re a veteran, active-duty service member, or qualifying spouse, a VA loan is often the strongest option available.

Benefits include:

• 0% down

• No monthly mortgage insurance

• Competitive interest rates

  
  

For eligible buyers, VA loans are often the clear winner! We absolutely love helping our veterans and active-duty service members (and we have amazing incentives to offer via Contour Mortgage!)

How I Help First-Time Buyers Choose the Right Loan

The best loan isn’t the same for every buyer — and that’s where strategy comes in.

When we work together, I help first-time buyers:

• understand what they comfortably want to spend monthly

• compare loan options side by side

• evaluate long-term cost vs. upfront savings

• factor in Texas-specific taxes, insurance, and HOA/MUD fees

• feel confident before ever stepping into a showing

  
  

This approach is why so many first-time buyers — and the Realtors who refer them — trust me as their mortgage partner.

Common First-Time Buyer Mistakes to Avoid

❌ Waiting too long to get pre-approved

❌ Assuming 20% down is required

❌ Focusing only on interest rate

❌ Not planning for taxes and insurance

❌ Relying on online calculators alone

A strong pre-approval and a clear plan make all the difference.

👉 Helpful next step: How to Get Pre-Approved for a Mortgage in Texas

The Bottom Line

First-time homebuyers in Texas have more options than they think — but choosing the right one requires clarity, education, and a lender who takes the time to guide you.

As one of the top mortgage originators in the Greater Houston area, my goal is simple: to make your first home purchase feel confident, informed, and exciting — not stressful.

Ready to Start Your First Home Journey?

Whether you’re buying in The Woodlands, Conroe, Spring, Cypress, Montgomery, Katy, or anywhere in Greater Houston, I’ll help you make a confident and strategic decision.

👉 [Schedule your consult →] Schedule with Megan Bludau 

👉 [Submit your mortgage application→] Get Pre-Approved Now

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