How Much Down Payment to Buy a House in Houston

The short version

• 20% down is a myth for most buyers; it's not required, it just avoids PMI on conventional loans.
• Common minimums: 3% conventional, 3.5% FHA, and 0% for VA and USDA if you're eligible.
• Texas offers down payment assistance through agencies like TDHCA and TSAHC for buyers who qualify.
• Budget for closing costs too, often about 2% to 5% of the loan amount, on top of the down payment.

What you actually need

The right down payment depends on the loan:

• Conventional: as little as 3% down, especially for first-time buyers. Reaching 20% removes private mortgage insurance.
• FHA: 3.5% down with a credit score around 580 or higher.
• VA: often 0% down for eligible veterans and service members.
• USDA: 0% down in eligible rural areas, and parts of the greater Houston metro's outer edges may qualify.

More down means a lower monthly payment and less interest over time, but putting every dollar into the down payment can leave you short on reserves, so balance it against your savings.

Don't forget closing costs

Down payment isn't the only cash you'll need. Closing costs in Texas often run about 2% to 5% of the loan amount and cover items like appraisal, title, lender fees, and prepaid property taxes and insurance. In Houston, prepaid escrow can be sizable because Texas property taxes are typically higher than the national average. Sometimes sellers contribute toward closing costs, which is worth negotiating, especially on homes that have been on the market a while.

Help paying for it in Texas

Texas offers down payment assistance through programs run by agencies like the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). These can provide grants or second-loan assistance for eligible buyers, and some are geared toward first-time buyers, teachers, first responders, and other groups. Income limits and property requirements apply, and program details change, so confirm current terms before counting on them. Gift funds from family are also allowed on many loan types with proper documentation.

The bottom line: ask a lender to show you scenarios at 3%, 5%, 10%, and 20% down using realistic Houston taxes and insurance, so you can see how each choice changes your monthly payment and upfront cash.