FHA Loans in Austin Texas
Federal Housing Administration (FHA) loans remain the most popular government-backed mortgage for non-veteran buyers in Austin. With a 3.5% minimum down payment and more lenient credit requirements than conventional loans, FHA opens the door to homeownership for thousands of Central Texas buyers each year.
2024 FHA Loan Limits in Austin Metro Counties
FHA loan limits are set by county and updated annually by HUD.
| County | 2024 FHA Loan Limit |
|---|---|
| Travis County (Austin) | $766,550 |
| Williamson County (Round Rock, Georgetown) | $766,550 |
| Hays County (Kyle, Buda) | $766,550 |
| Bastrop County | $498,257 |
| Caldwell County | $498,257 |
Travis, Williamson, and Hays counties qualify for the higher-cost FHA limit, giving Austin-area buyers access to FHA financing across most of the metro's price ranges.
FHA Loan Requirements in Texas
Credit Score
- 580+: 3.5% down payment
- 500-579: 10% down payment
- Below 500: Not eligible for FHA
Down Payment
- Minimum 3.5% of the purchase price
- Can be gifted from family (with proper documentation)
- Can be funded by down payment assistance programs
Debt-to-Income Ratio
- Front-end DTI: Up to 31% of gross monthly income
- Back-end DTI: Up to 43% (higher with compensating factors)
Income Requirements
- No minimum income requirement
- 2-year employment history preferred (with same employer or in same field)
- Self-employed borrowers need 2 years of tax returns
Property Requirements
- Must be the borrower's primary residence
- Must meet FHA Minimum Property Standards (similar to VA MPRs)
- 1-4 unit properties eligible (must occupy one unit)
- Condos must be FHA-approved or receive spot approval
FHA Mortgage Insurance Premium (MIP)
FHA requires two types of mortgage insurance:
Upfront MIP (UFMIP):
- 1.75% of the loan amount
- Usually financed into the loan
- On a $380,000 loan: $6,650
Annual MIP (paid monthly):
- 0.55% per year (for 30-year loans, less than 10% down)
- On a $380,000 loan: approximately $174/month
- Duration: Life of the loan (for loans with less than 10% down originated after June 2013)
FHA vs. Conventional: Austin Market Comparison
For a $380,000 Austin-area home:
| FHA (3.5% down) | Conventional (5% down) | |
| -- | ----------------- | ------------------------ |
| Down Payment | $13,300 | $19,000 |
| Monthly MIP/PMI | $174 | ~$140 |
| MIP/PMI Duration | Life of loan | Until 20% equity |
| Min Credit Score | 580 | 620 |
| Rate (typical) | 7.0% | 7.25% |
For buyers with 620+ credit who can save 5%, conventional may be cheaper long-term due to removable PMI. For buyers with 580-619 credit or limited savings, FHA is often the only accessible option.
Best Austin Suburbs for FHA Buyers
Most Austin-area homes are well within the $766,550 FHA limit. Best value areas:
- Hutto: $300K-$360K range — strong new construction, FHA common
- Pflugerville: $320K-$400K — established neighborhoods, FHA-friendly sellers
- Kyle: $330K-$390K — growing market, good schools
- Buda: $340K-$400K — community character, I-35 access
Frequently Asked Questions
Travis, Williamson, and Hays counties (the core Austin metro) have a 2024 FHA loan limit of $766,550 — the high-cost area limit. This covers the vast majority of homes in the Austin metro, including Georgetown, Round Rock, Kyle, and Buda.
Yes, but the condo project must be FHA-approved or receive spot approval. Search the FHA condo approval list at hud.gov. Austin has a number of FHA-approved condo communities. If your preferred condo is not approved, you may need a conventional loan or ask the HOA to pursue FHA approval.
For any veteran who qualifies for a VA loan, the VA loan is almost always the better choice — zero down (vs 3.5%), no mortgage insurance ever (vs MIP for life), and typically lower interest rates. The only exception would be if the veteran's VA entitlement is exhausted or if the property is VA-ineligible.
