Houston First Time Home Buyer Guide (2026 Updates)

Ready to know how to buy a home in the Space City?

With a year-round warm climate and a zero state income tax, Houston offers a desirable lifestyle with financial benefits. Your dream home could be a spacious single-family house in Houston Heights or a luxury high-rise condo overlooking Downtown’s skyline.

Whether you’re a Houston first time home buyer or new to the Houston housing market, this guide will provide you with everything you need to know. We’ve broken down the entire home-buying process into 13 actionable steps.

How to Buy a House in Houston for the First Time: 13 Steps!

These steps to buy a house in Houston will walk you through everything, from assessing finances and budgeting for a down payment to choosing the right mortgage. These 13 steps make home buying in Houston clear, simple, and manageable.

Step 1: Assess Your Finances

As a Houston first time home buyer, the two factors that should matter the most to you are your credit score and Debt-to-Income (DTI) ratio. Additionally, you must also consider how much you can afford for a down payment, a monthly mortgage, taxes, and insurance.

What Is Your Credit Score?

A credit score is a three-digit number that indicates your creditworthiness to lenders. The minimum credit score to buy a house in Houston depends on the type of mortgage you get.

Minimum and Ideal Credit Scores by Loan Type

Loan Type	Minimum Score	Ideal Score
FHA	500 (10% down)	580+ (3.5% down)
Conventional	620	740+ for best rates
VA	No minimum	620
USDA	No minimum	640

Portfolio mortgage loans are easy to qualify for. Here, the credit score needed to buy a house starts at around 580. VA loans are available only to veterans and active-duty service members, and require a score of 620. FHA loans also accept scores as low as 580. They are good for buyers with lower credit scores looking for houses in Houston.

How to Calculate Your Monthly Mortgage Payment in Houston?

As a Houston first time home buyer, knowing your average mortgage payment helps you plan your budget. Your total payment includes 4 key components, often called PITI:

• Principal and Interest: This is a major chunk of your payment, covering the amount you borrowed (principal) and the cost of borrowing (interest). It’s determined by your loan amount, interest rate, and loan term.​
• Taxes: Texas property taxes are based on your home’s assessed value. The lender holds these funds in an escrow account and pays the tax on your behalf.​
• Insurance: Lenders require you to have homeowners’ insurance to protect the property. The annual premium is usually divided by 12 and added to your monthly payment, also managed through the escrow account.

Apart from PITI, your monthly payment may also include Private Mortgage Insurance if your down payment is less than 20%, and HOA fees.

What Is a Debt-to-Income (DTI) Ratio?

Your debt-to-income ratio shows how much of your monthly income goes toward debt payments, including mortgage, car loans, credit cards, and student loans. To calculate it, add all monthly debts and divide the total by your gross pre-tax monthly income.

A high DTI can prevent you from qualifying for a mortgage, as it shows that you struggle to manage your debt. For the best mortgage rates and a higher likelihood of mortgage approval in Houston, aim for a DTI ratio of 36% or lower.

💡 You can still qualify for a loan in Houston despite a high DTI if you have compensating factors like a strong credit history, significant cash reserves or savings, stable long-term employment, etc.

Recommended DTI Ratios by Loan Type

Loan Type	Recommended DTI Ratio	With Compensating Factors
Conventional	36% back-end	45-50%
FHA	43% back-end	Up to 50%
VA	41%	Can exceed 50% with the residual income test
USDA	41% back-end	44% with strong credit

Step 2: Budget for Your Down Payment and Closing Costs

You should set aside money for the down payment and closing costs. Houston’s first-time home buyer programs help make homeownership accessible and affordable.

How Much Down Payment Does a Houston First Time Home Buyer Need?

Typically, the down payment on a house for a Houston first time home buyer ranges from 3% to 20% of the property’s price, depending on the loan type. FHA loans require just 3.5% down, while some conventional loans allow a 3% down payment.

To help with these upfront costs, there are many state and local down payment assistance programs in Houston. They provide grants or loans to cover these expenses.

👉 First-Time Home Buyer Programs in Houston: Find out which is the #1 downpayment assistance program in the Space City.

How to Estimate Closing Costs in Houston?

Closing costs are fees and expenses paid at closing beyond your down payment. Typically, buyer closing costs in Houston usually range from 2% to 5% of the home’s price. So, for a $404,400 home, buyers might pay $14,698 to $20,715.

These fees cover lender charges, appraisals, inspections, title insurance, taxes, agent commissions, and recording fees when buying a property in Houston.

Step 3: Get Pre-Approved for a Mortgage

Secure your financing early by getting pre-approved for a mortgage as a first time homebuyer in Houston. This step helps you understand your budget and strengthens your offer when buying a house.

How to Get Pre-approved as a First Time Home Buyer in Houston?

You need to follow these steps to get pre-approved when buying a house in Houston:

1. Gather Financial Documents: Provide proof of income (recent pay stubs and W-2s), tax returns (last two years), asset statements, debt information, and a government-issued ID.
2. Choose a Lender and Apply: Compare lenders in Houston and submit a mortgage application to get the best rates and terms.
3. Receive Pre-Approval Letter: The lender verifies your info and issues a letter stating your approved loan amount, usually valid for 30-90 days.

Step 4: Choose the Right Mortgage

As a first time homebuyer in Houston, assess your finances and select a loan that fits your budget and qualifies you for available programs.

Feature	Conventional	FHA	VA	USDA
Min Credit Score	620	580 (500 w/10% down)	No minimum	640
Min Down Payment	5% to 20%	3.5%	0%	0%
Max DTI	45% to 50%	43% to 50%	41%+	41% to 44%
Mortgage Insurance	PMI if <20%	Always	None	Always
Loan Limits	$766,550+	$498,257 to $766,550	$766,550+	Varies
Property Eligibility Criteria	Few	Must meet FHA standards	Must meet VA standards	Rural/suburban areas only

Step 5: Decide Where to Buy a Home in Houston

Deciding where to buy is one of the most important steps for a first time homebuyer in Houston. Consider factors like local housing markets, popular neighborhoods, cost of living, and amenities to help you find the best places to live in Texas.

Why Now Is the Time to Buy in Houston?

The Houston housing market is a buyer’s market. You now have more negotiating power and a wider selection of properties to choose from:

• Housing Supply is High: Houston has a 6-month housing supply, which is the benchmark for a buyer’s market.
• Prices Have Stabilized: The median home price has remained relatively constant at $335,000.​ This allows you to set your budget with more certainty.
• Sellers are Negotiating: 27.4% of homes in Texas have seen price drops, signaling increased seller flexibility.​
• Homes are on the market longer: Properties are taking an average of 70 days to sell, which allows you to make more informed decisions.

These trends show that now is the best time for buying a house in Houston Texas. According to Mauricio Umansky, founder of The Agency, the current market provides “great opportunities for buyers to be aggressive and write strong offers.”

Popular Areas for Different Buyer Types

With the market now in your favor, you can be more selective about where you buy. Use this advantage to find a neighborhood that matches your priorities, whether it’s schools, commute, or lifestyle.

• Best Areas for Families: Neighborhoods such as The Heights, Sugar Land, and Katy are highly regarded for their excellent schools, family-friendly parks, and strong community atmosphere. If you envision life in a master-planned community designed for family connection, explore homes for sale in Cinco Ranch. Properties with access to top-tier schools and recreational amenities typically range between $350,000 and $600,000.
• Best Areas for Retirees: For those seeking an active retirement, areas like Pearland, Cypress, and Tomball offer low-maintenance living, golf courses, and vibrant social activities. If you are interested in a community renowned for its active lifestyle, consider homes for sale in The Woodlands, where prices generally range from $250,000 to $450,000.
• Best Areas for Young Adults: For those seeking an active retirement, areas like Pearland, Cypress, and Tomball offer low-maintenance living, golf courses, and vibrant social activities. If you are interested in a community renowned for its active lifestyle, consider homes for sale in The Woodlands, where prices generally range from $250,000 to $450,000.

Consider the Cost of Living When Choosing a Location

When looking at the best place for buying a house in Houston, consider the overall cost of living, as lower home prices can be offset by higher taxes or insurance.

• High-Cost Areas: River Oaks, West University, and Memorial are 20–30% above the Houston average, reflecting their luxury housing markets and prestigious amenities.
• Moderate-Cost Areas: The Heights, Montrose, and Midtown are near or just below the Houston average, offering a balance of affordability with access to schools, cultural attractions, and vibrant social scenes.
• Low-Cost Areas: Cypress, Pearland, and Katy are 10–18% below the Houston average, providing budget-friendly housing options in suburban communities with strong schools and family-oriented amenities.

Step 6: Start House Hunting in Houston

Once you’re pre-approved and know where you want to live, the next step is finding the right house. As a Houston first time home buyer, you have two options:

1. Work with a Realtor.
2. Search for homes online.

An experienced agent can give you valuable local insights and expert guidance on neighborhood trends. However, you’ll have to negotiate the buyer agent commission with the seller, which may raise the home sale price.

If you prefer to take the lead, a high-tech platform like Houzeo is what you need. Whether you’re looking for beachfront mansions, high‑rise penthouses, spacious big homes, or luxury homes in Houston, Houzeo has you covered. You can browse through thousands of listings, set alerts, and save your search. You can even schedule showings and submit offers all by yourself.

Step 7: Schedule and Attend Home Showings

After you narrow down your list of potential homes, schedule and attend showings to see each property in person. For a Houston first time home buyer, visiting homes firsthand helps you evaluate condition, layout, and neighborhood, ensuring you make an informed choice.

During the showing, ask specific questions like:

• How long has the home been on the market?
• Why is the owner selling?
• What is the age of the roof, HVAC system, and water heater?
• Are there any HOA fees or pending special assessments?
• Is the property located in a flood zone?

When buying a home in Houston, Texas for the first time, check the property carefully during the open house. Look for roof sagging, foundation cracks, water stains, uneven floors, or sticking doors, which may indicate serious issues.

Step 8: Make an Offer

When crafting an offer, make a competitive bid but stay within your budget. As a Houston first time home buyer, consider factors like the home’s market value, recent comparable sales, and any repairs needed. This increases your chances of getting a fair deal.

Step 1: Analyze Recent Sales

Your agent will pull up real estate comps that are similar to the one you want. Focus on the final sale price, not the list price. Home prices in many Houston metro areas have seen modest declines, so your offer should reflect this trend.​

Step 2: Adjust for the Home’s Condition

Factor in the age and condition of the roof and HVAC. If a comparable home sold for $335,000 but had a new roof, and your target home needs a $20,000 replacement, adjust your offer to account for that expense.

Step 3: Factor in Today’s Market

With more homes for sale, you have leverage. Even home builders are lowering their prices by almost 6% to attract buyers. So, for a home that is priced fairly, offer 3% to 5% less. If it is overpriced, you can justify an even lower offer, citing both the comps and market trends.

What is an Earnest Money Deposit in Houston?

An earnest money deposit is a “good-faith” payment that shows you are a serious buyer. This money is held in escrow and applied towards your down payment at closing.

In Houston, the standard earnest money deposit is typically 1% of the purchase price. On a $404,300 home, this would be about $4,043. In more competitive neighborhoods like River Oaks, West University, or The Heights, sellers may expect deposits closer to 3% to 5% to show serious intent.

Once your offer is accepted, you typically have 3 business days to submit the deposit to an escrow agent, such as a title company or real estate attorney.

Step 9: Conduct Home Inspections

First-time home buyers in Houston should schedule home inspections to uncover any issues before buying a house. You typically get the inspection report within 24 to 48 hours.

Which Houston Home Inspections Should You Schedule?

A standard home inspection in Houston, Texas, is essential, but given the city’s climate, soil conditions, and flood risks, additional specialized inspections are often recommended:

• General Home Inspection ($300–$500): A licensed inspector will examine the property from roof to foundation. In Houston, particular attention is paid to foundation integrity (due to expansive clay soils), roof condition, drainage systems, and the age of the HVAC unit, which is critical in the city’s hot climate.

• 4-Point Inspection ($150–$250): Insurance companies may require a 4-point inspection for homes over 30 years old. It focuses on the four most critical systems: roof, HVAC, electrical, and plumbing. An aging roof or outdated electrical panel can affect insurance eligibility.

• Flood Risk and Drainage Inspection ($100–$200): Given Houston’s bayou system and history of flooding, many buyers schedule inspections to evaluate floodplain risks, drainage capacity, and sump pump functionality. This can help determine whether flood insurance will be required and ensure the property is adequately protected.

• Termite and Pest Inspection ($75–$150): Houston’s warm, humid climate makes termite activity a common concern. Inspectors check for signs of infestation or structural damage, which can be costly if left untreated.

Consider Other Specialized Inspections

Based on the property, a Houston first-time home buyer may want to conduct additional tests. For older homes, a sewer scope can detect cracks or tree roots in the main sewer line, saving you from a $15,000 repair down the road. If you see large cracks or uneven floors, a $700 foundation inspection is worth the investment.

For rural properties, a septic inspection is essential. If the home has a pool, a separate pool inspection will check the pump, filter, and structure for costly defects.

Step 10: Complete the Home Appraisal

After the inspection, your lender will typically order a home appraisal, which professionally values the property to ensure it matches your offer.

Why Do Lenders Need Appraisals?

A home appraisal in Houston confirms the property’s market value. Appraisers typically focus on the following parameters:

• Flood Zone and Elevation: A home in a high-risk flood zone (like Zone AE or VE) will likely be valued lower than a similar inland property due to higher insurance premiums.
• Insurance and Mitigation Features: The age of the roof, the presence of hurricane shutters, and impact-resistant windows directly affect a home’s insurability and, therefore, its market value.
• Condo/HOA Health: Appraisers closely examine a condo association’s financial health. They look for anything that may reduce the unit’s value, like the association’s reserve funds or any pending special assessments.

A standard appraisal in Houston costs between $70 and $650 and typically takes 7 to 14 days to complete. For luxury or waterfront properties, the cost and timeline can be higher.

Step 11: Negotiate Repairs and Credits

As a Houston first-time homebuyer in Houston, use your home inspection results to negotiate repairs and request credits from the seller. This step can help reduce unexpected costs and ensure your new house is move-in ready.

Should You Ask for Repair Credit?

While you can ask the seller to perform the repairs themselves, it’s better to ask for credit instead. Credit gives you the funds to hire your own contractors and ensures the work is done to your standards, not just the cheapest way possible.​ It also allows the sale to proceed on schedule, without any delays.

How to Negotiate Seller Concessions

Seller concessions are a powerful tool for reducing your out-of-pocket closing costs when buying real estate in Houston. Here, the seller pays for some of your expenses, such as the appraisal, title insurance, or property taxes.​

Your ability to negotiate concessions depends on your loan type. Each loan program sets a maximum limit on how much a seller can contribute:

Loan Type	Minimum Down Payment	Maximum Seller Concession
Conventional	Less than 10%	3% of the purchase price
Conventional	10% or more	6% of the purchase price
FHA Loan	Any amount	6% of the purchase price
VA Loan	Any amount	4% of the purchase price
USDA Loan	Any amount	6% of the purchase price

Step 12: Review Your Closing Costs

After negotiating repairs and credit as a Houston first time home buyer, review all closing costs carefully. Check title fees, escrow, insurance, and taxes so you can finalize your budget and confidently buy your house.

Understanding Closing Costs in Texas

• Texas-Specific Taxes ($0): Texas does not levy a documentary stamp tax or intangible tax on mortgages. This makes Houston closings less expensive in terms of state-imposed taxes.

• Title Fees ($1,500–$2,500): These fees cover the title search, settlement services, and title insurance policies. In Houston, buyers typically pay for the lender’s title insurance, while the seller often pays for the owner’s title policy, though this can be negotiated.

• Third-Party Fees ($1,000–$1,500): Includes appraisal ($500–$700), credit report ($50–$100), and flood certification ($20–$50). Houston’s flood-prone geography means flood certification is standard. Optional inspections (general, termite/WDO, foundation) add to this category.

• Prepaid and Escrow Costs ($3,000–$6,000): Buyers prepay one year of homeowners insurance (often $1,500–$3,000 in Houston due to storm risk) and fund escrow with property taxes plus insurance reserves.

Step 13: Close on Your New Home

Closing day is the moment you officially become the owner of your new Houston home. Its success depends on a careful final walk-through, a smooth funding process, and making sure all legal documents are properly signed and recorded.

Complete Your Final Walk-Through

Within 24 hours of closing, you will do one last walk-through of the property. This is not a formal inspection, but rather your final chance to see if you want this home. Use this checklist:​

• Verify Repairs: Bring your inspection report and repair addendum. Confirm that all negotiated repairs have been completed to a professional standard.
• Test Everything: Run the air conditioning and test all appliances. Make sure every system is functioning as it should.
• Check for Included Items: Ensure all items that were supposed to be included in the sale, like appliances, window treatments, and light fixtures, are still in place.
• Look for Signs of Additional Damage: Make sure no new damage has occurred since your last visit. If you see any issues, notify your agent and the title company immediately before you sign any documents.

Sign the Documents

While there are numerous documents to sign, the most important ones are​:

• The Closing Disclosure: You will sign the final version of this document, which outlines all your loan terms and costs.
• The Promissory Note: This is your legal promise to repay the loan. The promissory note outlines the loan amount, interest rate, repayment schedule, and maturity date.

• The Mortgage: This document secures the property as collateral for your loan.

Once you have signed everything, you will provide your “cash to close” amount via a cashier’s check or wire transfer. After your lender sends their funds to the title company, the deal is officially funded.​

Get Your Keys and Celebrate

Once the deal is funded, the title company will record the new deed with the county, officially transferring ownership to you. After they pay the seller and other parties, you will finally get the keys to your new home.​

Congratulations, you are officially a Houston homeowner! 🎉

🚩 What are the Red Flags to Look for When Buying a House in Houston?

A new home in Houston is a huge financial investment. To ensure you don’t sink your money into a dud, watch out for these red flags:

1. Bargain-Priced Homes

An asking price that’s significantly lower than comparable homes in the area seems like a dream come true. But that’s just until the roof collapses or faulty electrical systems burn the house down.

An extremely low price could mean the property is uninsurable, or is located in a high-risk flood zone with steep insurance costs. So before you put in an offer, check the home’s sale history and other permits from the local county’s office. Also, get insurance quotes to understand your total expense better.

2. Neighborhood Sell-Out

During the open house, if you notice too many “For Sale” signs on a single street or in a small community, it should ring alarm bells. It could be due to skyrocketing HOA fees, declining school quality, or a recent increase in crime rates. It could also point to a future nuisance, like a commercial development planned nearby.

Talk to potential neighbors to get their opinion on the area. You can also check community social media pages or online forums like Nextdoor for discussions about local issues.

3. Excessive Use of Air Fresheners

A few scented candles create a welcoming atmosphere, but if a home smells like a lavender bubble burst in it, then there’s something fishy. It may be covering up a musty smell that highlights the presence of mold and plumbing issues.

Pay close attention to the smell in the closets, bathrooms, and around the air conditioning unit. Open kitchen and bathroom cabinets and smell the area under the sink. If you detect a musty odor, ask for a separate mold inspection along with the standard home inspection.

4. Sloping or Uneven Floors

Floors that are noticeably slanted or feel bouncy can indicate foundation problems. Given Houston’s clay soil, the soil settlement can cause the foundation to shift over time. Minor settling may be acceptable in older homes, but significant slopes signal a major structural issue.

Bring a marble or a golf ball with you to showings and place it on the floor in different rooms to see if it rolls. Also, look for other signs of foundation issues, like large zigzag cracks in the drywall, especially above door frames.

5. Condensation in Windows

Fog trapped between the panes of double-glazed windows is a sign that the seal has failed. When the seal breaks, the insulating argon gas leaks out and is replaced by moisture-filled air. This compromises the window’s energy efficiency and leads to higher cooling costs in Houston’s hot climate. 

Inspect each window and pay special attention to those that receive direct sunlight, as heat can cause seals to fail faster. If you see failed seals, get a quote for window replacement to use as a negotiating point.

6. Flood Risk and Water Damage

Flooding is one of the most serious risks to homes in Houston due to the city’s low elevation, clay-heavy soil, and frequent heavy rainstorms. When floodwaters rise, they can seep into foundations, walls, and flooring, leaving behind hidden moisture that weakens structural integrity and fosters mold growth. This not only damages the property but also creates long-term health hazards and costly repairs.

Inspect the home for signs of past water intrusion, especially in basements, crawl spaces, and ground-level rooms. Look for water stains, warped flooring, or a musty odor, as these can indicate previous flooding or ongoing moisture problems.

What Should You Do After Closing?

Welcome home! Now it’s time to handle a few must-dos to protect your investment:

• File for Homestead Exemption: If the house is your primary residence, apply for Texas’s Homestead Exemption to reduce your property taxes. In Harris County, this exemption can save you hundreds to thousands of dollars annually, which is especially valuable given Houston’s higher property tax rates compared to many other states.

• Set Up Utilities: Get the water, electric, natural gas, internet, and trash services connected. Since Houston’s electricity market is deregulated, shop around for the best provider rates. Don’t forget pest control—Houston’s humid climate means termites, mosquitoes, and roaches are active year-round.

• Get Insurance: Homeowners insurance is required if you’re financing, and flood insurance may be needed in FEMA flood zones. Rates are higher in areas near bayous or neighborhoods that flooded during Hurricane Harvey, so always check the property’s flood history before finalizing coverage.

• Home Maintenance Plan: Schedule AC tune-ups at least twice a year, clear gutters regularly, and inspect roofs for hail or storm damage. Houston’s clay soil makes foundation inspections important—look for cracks or settling every few years. Consider drainage improvements or sump pumps if your home is in a flood-prone area to reduce long-term risks.

How to Buy a House in Houston Without a Realtor?

Research neighborhoods and browse listings on trusted sites like Houzeo. Then, schedule showings directly with sellers or their agents. You can also hire a real estate attorney to review contracts and handle legal details.

Next, get pre-approved for a mortgage, make an offer, schedule inspections, and negotiate repairs. With the necessary due diligence, you can buy a house without a Realtor.

Which First Time Home Buyer Programs in Houston Can You Apply For?

Various programs make homeownership accessible for a Houston first time home buyer. They assist with down payments through grants or low-interest, deferred-payment loans. Applicants must meet the income and credit score criteria and complete a homebuyer education course to avail of these programs.

Program Name	Eligibility	Grants	Key Benefit
City of Houston Homebuyer Assistance Program	First-time homebuyers or those who haven’t owned a home in the last 3 years; income-qualified households	Up to $50,000 in forgivable loans for down payment and closing costs	No credit score requirement; loan forgiven after 5 years of occupancy
My First Texas Home (TDHCA)	First-time buyers and veterans; income and purchase price limits apply	Up to 5% of loan amount for down payment and closing costs	30-year fixed-rate mortgage with competitive interest rates
Texas Mortgage Credit Certificate (MCC)	First-time buyers or veterans; income and purchase price limits	Annual tax credit up to $2,000	Reduces federal income tax liability, freeing up cash for mortgage payments
Harris County HFC Bond Program	First-time buyers in Harris County; income-qualified	Down payment assistance tied to bond-funded mortgages	Provides low-interest mortgages with built-in assistance
Houston Habitat for Humanity DPA Programs	Low-to-moderate income families; must complete Habitat’s homeownership program	Varies by program, typically $10,000–$15,000	Affordable housing opportunities with education and support services

1. City of Houston Homebuyer Assistance Program

Eligible Buyers: First-time homebuyers purchasing within Houston city limits.

Credit Score: Minimum 580–640 depending on lender requirements.

Assistance: Up to $50,000 in down payment and closing cost help through a forgivable, 0% interest loan.

The City of Houston Homebuyer Assistance Program (HAP) provides significant financial support to first-time buyers. Assistance is structured as a deferred, forgivable loan, making homeownership more accessible. Buyers must meet income limits, complete a homebuyer education course, and purchase a home within Houston city limits.

2. My First Texas Home

Eligible Buyers: First-time homebuyers and veterans across Texas.
Credit Score: Minimum 620.
Assistance: 30-year, low-interest fixed-rate mortgage plus up to 5% of the loan amount for down payment and closing costs.

The My First Texas Home program, offered by the Texas Department of Housing and Community Affairs (TDHCA), helps buyers bridge upfront costs. It provides competitive mortgage rates and down payment assistance. Veterans and buyers in targeted areas may qualify, even if not first-time buyers. This program can be combined with the Texas MCC for added tax benefits.

3. Texas Mortgage Credit Certificate (MCC)

Eligible Buyers: First-time homebuyers (exceptions for veterans and targeted areas).

Credit Score: Determined by participating lenders.

Credit Score: Determined by participating lenders.

Assistance: Annual federal tax credit equal to up to 15% of mortgage interest paid.

The Texas MCC program reduces federal income tax liability by refunding a portion of mortgage interest as a tax credit. This effectively lowers the borrower’s interest rate and increases affordability. Buyers must meet income and purchase price limits, and the property must be located in Texas. MCCs can be paired with TDHCA loan programs for maximum benefit.

4. Harris County HFC Bond Program

Eligible Buyers: First-time homebuyers in Harris County.

Credit Score: Minimum 620.

Assistance: 30-year, low-interest mortgage loans with up to 5% down payment assistance.

The Harris County Housing Finance Corporation (HFC) issues mortgage revenue bonds to fund affordable loans. Through partnerships with TDHCA, buyers can access fixed-rate mortgages and down payment support. The program is designed to expand affordable housing opportunities in Harris County and is available only through approved lenders.

5. Houston Habitat for Humanity DPA Programs

Eligible Buyers: Low- to moderate-income first-time homebuyers.

Credit Score: Flexible; determined case-by-case with lender support.

Assistance: Down payment matching programs, subsidies, and coordinated assistance to reduce upfront costs.

Houston Habitat for Humanity offers tailored down payment assistance programs to help families achieve sustainable homeownership. Support includes savings matching, lender negotiations, and subsidies to lower barriers. Buyers also receive education on financial wellness and home maintenance, ensuring long-term stability.

» First Time Buyer Programs: Find the perfect program that helps you get the key to your first home.

What Should You Know Before Buying a House in Houston?

Before purchasing a home in Houston, you must understand the local factors that can significantly impact your budget and lifestyle.​

What are Some Additional Costs When Buying Houses in Houston?

Apart from the purchase price, you must account for several other expenses, such as property taxes, homeowners’ association (HOA) fees in certain communities, and flood insurance. The most critical consideration for any Houston homebuyer is insurance and flood risk.

• Why Homeowners Insurance is Crucial: Houston’s location along the Gulf Coast makes it vulnerable to hurricanes, tropical storms, and flooding. Homeowners insurance is essential to protect your investment against wind damage, hail, and other weather-related risks.

• Flood Insurance Costs: Unlike many other cities, much of Houston lies in flood-prone areas. Standard homeowners insurance does not cover flooding, so separate flood insurance is often required. Annual premiums can range from $500 to over $2,000, depending on whether the property is inside a FEMA-designated floodplain.

• High Property Taxes: Texas does not levy a state income tax, but property taxes are among the highest in the nation. In Harris County, effective property tax rates average around 2.0–2.3% of assessed value, which can add thousands of dollars annually to your housing costs.

• Choosing the Right Policy: When selecting insurance, ensure your coverage includes windstorm and flood protection. You may lower premiums by choosing homes outside high-risk flood zones, or properties with mitigation features such as elevated foundations, impact-resistant windows, or newer roofs.

Do You Need Separate Flood Insurance in Houston?

Yes, you do. Standard homeowners’ insurance does not cover flood damage, so a separate policy is necessary for protection. FEMA maps determine your property’s flood risk:

Flood Zone	Risk Level	Insurance Recommendation
A, AE, V, VE	High-Risk	Mandatory for most mortgages. These areas have at least a 1% chance of flooding annually.
B, C, X	Low-to-Moderate	Highly Recommended. Roughly 25% of all flood claims happen in these “lower-risk” areas.

When is Flood Insurance Required?

Whether you need flood insurance typically depends on your property’s location, your mortgage lender, and your homeowners’ insurance provider. However, there are two main situations where flood insurance is mandatory in Houston:

• Federally-Backed Mortgages in High-Risk Zones: If your home is in a high-risk flood zone and you have a federally-backed mortgage, federal law requires you to have flood insurance.​
• Citizens Property Insurance Policies: Florida state law requires most homeowners with policies from Citizens Property Insurance to have flood insurance. As of January 1, 2025, this applies to all homes insured by Citizens with a value of $500,000 or more, regardless of their flood zone.

Why First-Time Homebuyers Should Explore Houston Now?

Houston is a smart choice for first-time buyers, thanks to its no-income-tax policy and a market that now favors buyers. When looking to buy a home in Houston there’s a community for every budget.

With thousands of homes for sale and numerous down payment assistance programs, homeownership is more attainable than ever.