FHA loans • Austin & Central Texas

FHA Loans in Austin, Texas

Is 3.5% down and a 580 score enough to buy here?

If conventional wants more down payment or a higher score, FHA is the file I compare next. The 2026 single-family limit in Travis, Williamson, and Hays counties is $571,550. I will also tell you when the mortgage insurance makes FHA the more expensive loan over time.

See My Options Book a 15-Min Call (512) 956-6010

By Adam Styer, Senior Loan Officer • NMLS #513013 • Company NMLS #2072896

Down Payment

3.5% Down

Minimum with 580+ FICO score

Austin Limit

$571,550

2026 Travis/Williamson baseline limit

Credit Flexibility

580+ Min FICO

Lenient debt-to-income up to 50%+

Down Payment Gift

100% Gift Allowed

Family assistance or DPA permitted

What should I know about this option?

What Is an FHA Loan in Austin, Texas?

An FHA loan is a residential mortgage insured by the Federal Housing Administration (HUD) and issued by approved lenders. The insurance is what lets a lender approve a score starting at 580 or a down payment of 3.5%. It is not, by itself, a cheaper rate.

In the Austin metro area, the 2026 single-family FHA loan limit is $571,550. FHA loans require both an upfront mortgage insurance premium (UFMIP of 1.75%, which can be rolled into your loan balance) and an annual mortgage insurance premium (MIP of 0.55%, paid monthly). Unlike conventional PMI, FHA MIP remains for the life of the loan when putting less than 10% down, but borrowers frequently refinance into a conventional mortgage once their home value increases to 20% equity.

Common Situations

Who This Program Is Built For

The situations where I open this file first.

First-Time Homebuyers

Put just 3.5% down on homes up to $571,550 in Austin, Round Rock, or Buda, keeping personal savings intact for reserves and moving expenses.

Scores Between 580–650

If your score is roughly 580 to 660, I compare FHA with conventional. FHA is often the one that approves. It is not automatically cheaper once the mortgage insurance stays on the loan.

Higher Debt-to-Income

FHA automated underwriting permits total debt-to-income ratios up to 45%–50%+ with compensating factors, higher than standard conventional caps.

Down Payment Gift Recipients

100% of your 3.5% down payment and closing costs can be gifted by a family member or funded through qualified Texas down payment assistance programs.

Options & Milestones

Simple Options & 3-Step Process

The versions of this loan I actually use, and how my team and I move a file.

30-Year Fixed FHA

Principal and interest stay fixed for 30 years. These loans do not have a prepayment penalty.

Best for: Maximum long-term payment stability

15-Year Fixed FHA

You pay the balance off in half the time. The payment is higher. I only use this when the payment still fits the budget.

Best for: Faster equity build & total interest savings

FHA Streamline Refinance

Fast refinance for existing FHA borrowers to drop their interest rate and monthly payment with no new appraisal and streamlined income documentation.

Best for: Existing FHA owners seeking lower payments

Credit & Budget Review

I review your credit and debt ratios under FHA guidelines. That first look is not a hard credit pull.

Wholesale Lender Match

I compare FHA lenders on rate and credits for your score. Which one fits depends on the file.

Conditions Up Front

My team and I keep you posted on underwriting and the appraisal. I will not promise a seller a closing date.

Illustrative Scenario

In Action: A Clear Scenario

A transparent look at real-world numbers, underwriting parameters, and successful funding.

Illustrative Case • First-Time Homebuyer Round Rock, Texas

Round Rock First-Time Buyer — 3.5% Down with 615 Credit Score

The Situation: An Austin-area healthcare professional purchasing a first home for $425,000 in Round Rock. They had a 615 credit score from past medical bills and had $18,000 in liquid reserves.

The Challenge: A retail bank denied their conventional application because their credit score was under 620 and their debt-to-income ratio stood at 46%.

The Wholesale FHA Solution: Adam structured an FHA mortgage requiring just 3.5% down ($14,875). The 1.75% upfront MIP ($7,177) was financed into the loan balance ($417,302), and the monthly MIP was $191/month. Automated underwriting approved the 46% DTI, and Adam closed the loan in 18 days, allowing the buyer to move into their home on schedule.

Disclosure: Illustrative scenario based on composite borrower profile. Actual interest rates, loan limits, and qualification guidelines depend on credit profile, property appraisal, and lender criteria.

Supporting Research & Worksheets

Explore the Details

In-depth underwriting guidelines, loan matrices, and interactive tools in our specialist resources.

Texas FHA Loan Requirements & Guidelines (2026) Read Guide →

Detailed breakdown of credit minimums, debt-to-income caps, and required documentation.

FHA vs. Conventional Austin Comparison Guide Compare Loans →

Side-by-side comparison of monthly PMI vs permanent MIP and total 5-year costs.

Austin Down Payment Assistance Programs Explore DPA →

State and local Texas assistance grants and forgivable second liens for first-time buyers.

FHA Monthly Payment & MIP Calculator Calculate Payment →

Model your principal, interest, Texas property taxes, and monthly MIP in real time.

FHA Loan Requirements →

Clear Answers

Frequently Asked Questions

Straightforward answers to the questions Central Texas borrowers ask most.

What credit score do I need for an FHA loan in Austin?

FHA guidelines require a minimum credit score of 580 to qualify for the 3.5% down payment option. Borrowers with credit scores between 500 and 579 can qualify with a 10% down payment.

How much is FHA mortgage insurance (MIP)?

FHA requires an upfront mortgage insurance premium (UFMIP) of 1.75% of your loan amount, which is typically rolled into your total loan balance. You also pay an annual MIP of 0.55% (for loans with 3.5% down), divided into 12 monthly installments added to your mortgage payment.

Can I use gift funds for my entire FHA down payment?

Yes. FHA guidelines allow 100% of your 3.5% down payment and closing costs to come from documented gift funds from immediate family members, an employer, or an approved government assistance program.

What is the 2026 FHA loan limit in Austin and Travis County?

For 2026, the FHA loan limit for a single-family home in Travis, Williamson, and Hays counties is $571,550. Multi-unit limits are higher: $731,700 for duplexes, $884,450 for triplexes, and $1,099,150 for fourplexes.

Can I remove FHA mortgage insurance later?

For FHA loans where you put down less than 10%, MIP remains for the entire loan term. However, once you accumulate 20% equity through market appreciation or principal paydown, you can refinance your FHA loan into a conventional loan with zero PMI.

How I work • I compare lenders before I recommend one • Pricing without a retail bank markup • Clear communication and the conditions list up front • You work with me and my team

Scenario review

Want me to look at an FHA file?

Tell me the price, the timeline, and what you are trying to do. I will tell you whether this loan fits. This is a file review, not a credit pull.

See My Options

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