Texas Home Loans & Mortgage Rates

Texas is in the middle of a market correction that’s actually working in buyers’ favor.

After years of pandemic-fueled price spikes, the statewide median home price has settled to around $334,000 heading into 2026. Homes are taking longer to sell (about 72 days on market), inventory has climbed to a healthy 5.2-month supply, and sellers across Dallas, Houston, Austin, and San Antonio are cutting prices and offering concessions that were unthinkable two years ago.

The correction isn’t uniform. Austin has pulled back the hardest (down roughly 3.6% year-over-year) while Houston and San Antonio have seen more modest adjustments. Dallas-Fort Worth sits somewhere in the middle. But across the board, the trend is the same: more inventory, less competition, and better negotiating position for buyers.

Texas also brings two things that make it one of the best states for first-time buyers. First, the TDHCA and TSAHC run some of the most generous down payment assistance programs in the country, with up to 5% of your loan amount in forgivable assistance. Second, major cities like Houston, Austin, Dallas, and San Antonio all run their own local DPA programs on top of the state options, with some offering up to $40,000-$60,000 in help.

Mpire Direct is licensed across Texas. Below you’ll find county-specific loan limits, the state’s best assistance programs, closing cost details, and the property tax reality every Texas buyer needs to understand before purchasing.

2026 Loan Limit Takeaways

Most Texas counties sit at the standard FHA baseline of $541,287. The Dallas-Fort Worth metro counties (Collin, Dallas, Denton, Tarrant, Rockwall) come in at $563,500 for FHA. The Austin-area counties (Travis, Williamson, Hays) and Midland hit $571,550. Conforming limits are a uniform $832,750 across all 254 Texas counties with no high-cost exceptions.

If you need financing above the conforming limit, you’re looking at a jumbo loan. Mpire Direct offers jumbo programs across Texas.

Down Payment Assistance Notes

You must work with lenders approved by TDHCA, TSAHC, or SETH. Regular lenders don’t always offer these programs — ask about DPA before you start shopping for homes. Income limits are hard ceilings: if you’re $500 over, you’re disqualified. Homebuyer education (about 6 hours online) is required for most programs. Complete it early, not while you’re under contract.

Major Texas cities also run their own local DPA programs that can sometimes be stacked with state assistance: Houston offers up to $50,000 through its HOPE program, Austin provides up to $40,000 in forgivable zero-interest loans, Dallas has programs up to $60,000, and San Antonio offers up to $30,000 through its HIP 80/HIP 120 programs.

Closing Costs in Texas

Texas closing costs are fairly standard compared to other states, but there are a few things buyers need to know.

No State Income Tax: Like Florida, Texas has no state income tax. This is a major draw for relocating buyers and helps offset some of the state’s other costs (namely, property taxes).

No Transfer Tax: Texas does not charge a documentary stamp tax or transfer tax on real estate transactions. This saves both buyers and sellers compared to states like Florida that charge 0.70% of the purchase price.

Title Insurance: Texas is one of the few states where title insurance rates are set by the Texas Department of Insurance. Rates are the same regardless of which title company you use. On a $334,000 purchase, expect to pay around $2,400-$2,800 for the owner’s policy. The seller customarily pays for the owner’s title insurance policy, and the buyer pays for the lender’s policy.

Option Period: Texas purchase contracts include a unique “option period” (usually 7-10 days) where the buyer pays a small fee ($100-$500) for the right to terminate the contract for any reason. This is essentially your due diligence window for inspections and is a Texas-specific contract feature.

Survey Requirement: Lenders in Texas typically require a property survey. If an existing survey is available, the seller may provide it. Otherwise, the buyer pays $400-$600 for a new survey.

Estimated Total Buyer Closing Costs: On a $334,000 purchase with a $320,000 mortgage, expect approximately $7,000-$10,000 in total buyer closing costs (roughly 2-3% of the purchase price). This includes lender fees, title insurance (lender’s policy), appraisal, survey, prepaid taxes and insurance, and recording fees.

Property Taxes in Texas

Here’s the reality check every Texas buyer needs: Texas has some of the highest property taxes in the country. The median annual property tax bill is approximately $4,232 on a median home value of $283,800. The effective rate runs about 1.49%, which is significantly above the national average of roughly 1%.

Why so high? Texas has no state income tax. Property taxes and sales taxes fund state and local government, schools, and infrastructure. Your property tax bill includes levies from multiple taxing entities: county, city, school district, and sometimes special districts (MUDs, hospital districts, etc.).

MUD Taxes: If you’re buying new construction in the suburbs of Houston, Dallas, Austin, or San Antonio, check whether the property is in a Municipal Utility District (MUD). MUD taxes can add 1-3% on top of your regular property tax rate, dramatically increasing your monthly payment. A home in a MUD district might have an effective tax rate of 3-4% instead of the typical 1.5-2%. Always ask about MUD status before making an offer.

Homestead Exemption: Texas offers a homestead exemption that removes at least $100,000 from your home’s taxable value for school district taxes (this was increased from $40,000 after recent legislative action). Most counties and cities also offer their own homestead exemptions of $5,000-$25,000. File with your county appraisal district. Over-65 and disabled homeowners get additional exemptions and a school tax freeze.

Protest Your Appraisal: Texas allows you to protest your property tax appraisal every year, and you should. The county appraisal district sets your home’s market value each January, and you have until May 15 (or 30 days after notice) to file a protest. Informal hearings often result in reductions. It’s free to protest and can save hundreds or thousands per year.

Budget accordingly. On a $334,000 home at a 1.5% effective rate, you’re looking at roughly $5,010/year or $418/month in property taxes. That’s on top of your mortgage payment. Factor this into your affordability calculations from day one.

USDA Loan Eligibility in Texas

Texas has massive USDA-eligible territory outside the major metro areas. Much of rural and exurban Texas qualifies, including areas within commuting distance of Houston, San Antonio, Austin, and Dallas-Fort Worth.

Counties and regions with significant USDA eligibility include: most of East Texas (Tyler, Longview, Lufkin, Nacogdoches), the Hill Country outside Austin and San Antonio, the Rio Grande Valley (excluding metro McAllen/Brownsville), the Texas Panhandle (Amarillo area), West Texas (outside Midland-Odessa metro), and the Coastal Bend (outside Corpus Christi metro).

Even in metro areas, outer suburban fringes often qualify. Areas 30-45 minutes outside Houston, Dallas, Austin, and San Antonio frequently have USDA-eligible pockets. A USDA loan means zero down payment and no PMI, which combined with Texas’s DPA programs can get you into a home with essentially nothing out of pocket.

Check the USDA eligibility map to see if your target area qualifies.