Home Financing in Houston | New Build, Credit and Loan Options

Demystifying Home Loans

Know Your Numbers Before You Make an Offer

The Houston market moves fast. A buyer who doesn't know their pre-approval amount loses to a buyer who does, sometimes on the same house, on the same day. Understanding your financing isn't a formality. It's the difference between an accepted offer and a consolation call.

The Agency Team works with buyers across every financing type: first-time purchasers using down payment assistance in Cypress, veterans using VA loans in Katy, and investors writing conventional offers on Memorial investment properties. We refer you to the right lender for your specific situation before we ever open a lockbox.

New Construction

New Build Financing

Builder incentives, construction loans, and what the sales office won't tell you.

Builder Preferred Lender vs. Independent

Lennar, Perry Homes, D.R. Horton, and Meritage all have in-house or preferred lenders. They offer closing cost credits, sometimes $10,000 to $20,000, tied to using their lender. That's real money. But so is a rate that's 0.5% higher over 30 years.

We compare the builder's net offer against two independent lender quotes on every new construction contract before our clients sign anything. Sometimes the builder wins. Sometimes the independent lender wins by more. You should know before you commit.

One-Time Close Construction Loans

A one-time close (OTC) loan locks your rate and closes once, covering both the build period and the permanent mortgage. No second qualification when the home completes. No risk of rates rising six months into a build.

Houston builders typically offer OTC through their preferred lender. If you're building custom or semi-custom outside a tract community, we connect you with independent lenders who specialize in OTC construction financing across Harris, Fort Bend, and Montgomery counties.

Builder Contracts Are Not Standard

New construction contracts in Texas favor the builder. Financing contingencies are narrow, earnest money is non-refundable faster, and design center upgrades can affect appraised value. Having an agent who has negotiated with Newmark, Tri Pointe, and Westin Homes before means fewer surprises at the appraisal.

Credit Preparation

Credit Options

A 60 to 180 day plan can move most Houston buyers from "not yet" to qualified.

Minimum Scores by Loan Type

580+: FHA (3.5% down)
620+: Conventional (3 to 5% down)
No minimum: VA (lenders typically want 580+)
640+: USDA (0% down, eligible Houston suburbs)

What Moves Your Score Fastest

Pay revolving balances below 30% utilization
Dispute reporting errors. 79M Americans have at least one
Become an authorized user on an established account
Avoid new credit inquiries while preparing to buy

How We Help Before You Qualify

We don't shelve buyers who aren't quite ready. We connect you with Houston-based HUD-approved credit counselors, build a 60 to 180 day preparation plan, and stay in regular contact so that when your score moves, we move fast, before the market does.

Loan Types

Finance Options

The right loan depends on your situation, not on what's easiest for the lender.

Most Common

Conventional

3 to 5% down. Requires 620+ credit. Best for buyers with stable employment and strong scores who want the lowest long-term cost. No upfront mortgage insurance premium. PMI drops off at 20% equity.

First-Time Buyers

FHA

3.5% down at 580+. More forgiving on debt-to-income ratios. Mortgage insurance is required for the life of the loan (unless you refi). A strong option for buyers who are light on reserves but have stable income.

Veterans & Active Duty

VA

0% down. No private mortgage insurance. Competitive rates. Only for eligible veterans, active duty, and surviving spouses. One of the most powerful financing tools in Houston's market. If you've earned it, use it.

Houston Suburbs

USDA

0% down for homes in eligible rural and suburban zones. Parts of Katy, Cypress, Pearland, Humble, and Conroe qualify. Income limits apply. We check eligibility on every suburban contract before recommending a loan type.

Down Payment Help

DPA Programs

Texas SETH Goldstar (up to 5% assistance, forgivable), My First Texas Home, and Harris County HFC programs. Income and purchase price limits apply. We refer clients to approved lenders who specialize in stacking DPA with FHA or conventional.

Luxury & Investment

Jumbo

Above the conforming loan limit ($766,550 in Harris County for 2024). Required for River Oaks, Memorial, West University, and upper-tier Woodlands properties. Typically 10 to 20% down, strong reserves required.

How It Works

From Pre-Approval to Keys

Four steps, no surprises. We walk every client through this before the first showing.

Get Pre-Approved

Before showings, before neighborhoods, before floor plans. A pre-approval letter is not optional in Houston. It's the entry ticket. You'll need pay stubs, W-2s, two years of tax returns, and bank statements. We refer you to lenders who turn around pre-approvals in 24 hours.

Match the Loan to the Property

A condo in Midtown, a new build in Katy, and an estate in River Oaks each have different financing requirements. Condo loans have HOA approval criteria. New builds have builder lender considerations. Estates may require jumbo. We identify the right loan type at the offer stage, not after the appraisal comes back wrong.

Application, Appraisal & Underwriting

Once you're under contract, the lender orders the appraisal and title search. Underwriting reviews your full file for compliance. In a Houston market where appraisals sometimes lag fast-appreciating neighborhoods, we advise on contract language that protects you if the appraisal comes in short.

Closing

Final walkthrough, homeowners insurance in place, closing disclosure reviewed 3 days before signing. Texas closings are coordinated through a title company. We work with several along the loop who handle same-week closings when the deal timeline compresses. You sign, you get keys.

Common Questions

Financing FAQ

Can I use a builder's preferred lender for new construction in Houston?

Yes, but compare rates first. Houston builders (Lennar, Perry Homes, D.R. Horton, Meritage) offer incentives like closing cost credits or rate buydowns tied to their preferred lender. Those incentives can be worth $5,000 to $15,000. However, independent lenders sometimes beat the net rate even after subtracting the incentive. We walk every new-build client through a side-by-side comparison before committing.

What credit score do I need to buy a home in Houston?

Minimum 580 for FHA (3.5% down), 620 for most conventional loans, and no minimum for VA loans (though lenders typically want 580+). If your score is below these thresholds, a credit improvement plan of 60 to 180 days can often move you into qualifying range. We connect buyers with Houston-based credit counselors who specialize in real estate preparation.

What is a one-time close construction loan?

A one-time close (OTC) loan combines the construction phase and permanent mortgage into a single closing. You lock your rate once, avoiding a second closing with updated qualification requirements when the home completes. This is the preferred structure for most Houston new build buyers. It removes the risk of rates rising or income changing between groundbreak and move-in.

Are there down payment assistance programs in Houston?

Yes. Texas has several active programs: SETH Goldstar (up to 5% assistance, forgivable), My First Texas Home (down payment + closing cost help), and Harris County Housing Finance Corporation programs for buyers in unincorporated Harris County. Income and purchase price limits apply. We refer clients to lenders who are approved originators for these programs.

What areas near Houston qualify for USDA financing?

USDA loans (0% down) apply to homes in designated rural and suburban zones. In the Houston metro, eligible areas include parts of Katy, Cypress, Pearland, League City, Humble, Conroe, and Tomball, depending on the specific address. We check USDA eligibility on every suburban property before recommending a loan type.

The Financing Process