Best Loan Programs for Houston First-Time Buyers

Let’s be real…buying your first home in Houston can feel like a lot. Prices are up, insurance is pricey, and interest rates aren’t where they used to be. But here’s the good news: Houston is still one of the most affordable major markets in the country, and there are plenty of loan options designed to help first-time buyers get in the game.

You just need someone to break them down in plain English. So, let’s do just that.

🏡 1. FHA Loan – Low Down Payment, More Flexibility

If you’ve got decent credit and limited savings, this is one of the easiest ways to get into a home.

• Down payment: 3.5%

• Credit score: 580+

• Who it’s good for: Buyers who don’t have a big down payment saved

• Where it works well: Katy, Cypress, Spring Branch, and other budget-friendly areas

🇺🇸 2. VA Loan – No Down Payment for Veterans

If you’re active duty, a veteran, or a qualified surviving spouse, this is the loan to use.

• Zero down payment

• No monthly mortgage insurance

• Lower interest rates

• Primary residence only

This program is one of the biggest financial benefits of military service — don’t sleep on it.

🌾 3. USDA Loan – 100% Financing in Rural Areas

You’d be surprised how many “suburban” Houston areas still qualify.

• Zero down payment

• Low mortgage insurance costs

• Income and location limits apply

• Works in places like Magnolia, Montgomery, Cleveland, Willis

Perfect if you want more land, more space, and lower insurance rates.

🧠 4. Conventional 3% Down – Best for High Credit Scores

If you’ve got solid credit and long-term plans, this is a smart move.

• Just 3% down

• PMI can be removed once you hit 20% equity

• Great if you want flexibility to turn the home into a rental later

Think of this one as a long-game loan for financially stable buyers.

💸 Bonus: Houston Down Payment Assistance Programs

Whether it’s TSAHC, SETH 5 Star, or the City of Houston’s assistance program, there are options to help cover down payment and/or closing costs — sometimes up to 5% of your loan amount.

The Bottom Line

There’s no “one-size-fits-all” loan — but there is a loan that fits you. And the difference between getting into a home this year or waiting another two? It’s usually just knowing your options.

If you’re a first-time buyer in Houston and want to figure out what’s possible, let’s run the numbers and build a plan that makes sense.

Paige Bowman | The Mortgage Collective
Houston’s trusted lender for clarity, confidence, and closings that actually make sense.