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FHA Down Payments in Texas: What 3.5% Does—and Does Not—Cover
By Ross Monsen, NMLS #1579300 • Updated October 14, 2026
Quick answer: An eligible FHA borrower may buy with 3.5% down, but the down payment is only one part of the cash needed for a purchase. Closing costs and prepaid expenses must also be addressed.
Start with the down payment
HUD describes FHA financing with down payments as low as 3.5%. Availability depends on your qualifications, property, and lender requirements. FHA insurance does not remove the lender’s responsibility to underwrite the loan.
A simple example
On an illustrative $300,000 purchase, 3.5% is $10,500. That is the down-payment calculation—not a complete cash-to-close estimate. The loan balance may also be affected by financed upfront mortgage insurance. Ask for a written estimate that shows every component separately.
What else should you budget for?
Ask about lender and settlement charges, appraisal, homeowners insurance, property-tax escrows, and mortgage insurance. Some costs may have been paid before closing. Earnest money and permitted credits can change the remaining amount due. Seller assistance, gifts, and assistance programs each have their own rules; do not assume they automatically cover every expense.
Questions to ask before making an offer
What is my estimated total cash to close? Does the estimate include mortgage insurance? What costs could change? If I use gift funds or seller credits, how must they be documented? A comfortable down payment should still leave room for moving expenses, repairs, and a personal emergency cushion.
Does 3.5% down guarantee approval?
No. A lender still reviews the application. A low down payment is a program feature, not an approval decision.
Source: HUD — Let FHA Loans Help You. Costs can also be reviewed using the CFPB Loan Estimate explainer.
Want to understand your numbers? Contact Ross.
The Mortgage Standard Group, LLC • Company NMLS #2795757 • 4616 Gibson St, Houston, TX 77007.
Ross Monsen, NMLS #1579300 • 713-705-2889 • ross@thestandard.mortgage.
Educational information only; not a commitment to lend. All loans subject to eligibility, underwriting, property, and lender requirements.
Licensed in Texas by the Department of Savings and Mortgage Lending • Texas SML Mortgage Company License • Equal Housing Opportunity.
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