Texas FHA Loan Requirements And Guidelines For Homebuyers

by Mike Gracz

FHA loans are the most popular loan programs due to the lenient Texas FHA Loan Requirements And Guidelines For Homebuyers. Many readers of Capital Lending Network, Inc. are from the great state of Texas. Other viewers are folks thinking of moving to Texas due to the great economy, low taxes, affordable housing, and low cost of living. FHA loans in Texas are ideal for homebuyers with little or no credit, those with prior bad credit, and borrowers with part-time or little and/or irregular income.

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FHA Lenders In Texas: Rules And Mortgage Regulations In Texas On Cash-Out Refinance Mortgages

Rules And Mortgage Regulations In Texas On Cash-Out Refinance Mortgages

There are three government-backed mortgage loan programs in the United States. HUD, the parent of FHA, is a federal government agency that is in charge of FHA lending requirements nationwide. All government loans are uniform throughout the 50 states in the nation.

Texas FHA And VA Cash-Out Refinance Guidelines

Texas has different FHA and VA mortgage guidelines on FHA loans and VA loans on cash-out refinance loans. The state of Texas prohibits cash-out refinance on FHA and VA loans. Texas only allows cash-out refinancing on conventional, jumbo, and non-QM loans. FHA loans are one of the three government-backed loan programs in the United States. USDA loans and VA loans are the other two government loan programs.  All government loan programs are for owner-occupant primary home loans only.

Texas Non-QM Loans Versus FHA Loans

Texas Non-QM loans are mortgages for bad credit and have similar mortgage requirements for bad credit like Texas FHA loans but require at least a 20% down payment. FHA loans in Texas only require a 3.5% down payment and rates are substantially lower than Texas non-QM loans.

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Texas FHA Loan Requirements For First-Time Homebuyers

First-time homebuyers opt to go with FHA loans due to the lenient Texas FHA loan requirements and guidelines. It is easier to get an approve/eligible per automated underwriting system on FHA loans for first-time homebuyers, borrowers with credit scores down to 500 FICO, homebuyers with high debt to income ratio, and borrowers with prior bad credit. In this blog, we will detail, the Texas FHA Loan Requirements And Guidelines For Homebuyers.

Texas Specific FHA Loan Requirements

There are a few nuances surrounding FHA lending and Texas-specific mortgage law.  Capital Lending Network, Inc. has been servicing Texas and dozens of other states for years with our no lender overlays on government and conventional loans business model. Texas FHA Loan Requirements And Guidelines are different than other states. This holds true on Texas FHA Loan Requirements And Guidelines on cash-out refinancing.

The Booming Texas Housing Market For Homeowners And New Homebuyers

Texas also referred to as the Lonestar state is one of the largest states in the United States. The state is located in the south-central region of the country and sprawls out over 268,000 square miles and is currently the home of over 29 million residents according to the most recent census (2020).

Texas Ranks As The Second Largest State Next To Alaska

The only state larger in size is Alaska and the only state larger in population is California. The state of Texas shares its border with numerous states including Louisiana, Arkansas, Oklahoma, New Mexico and. The southern border is the largest border with our neighboring country of Mexico.

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Making Texas Home

Texas is nicknamed the Lonestar state to remember its former status as an independent republic and is a reminder of the state’s struggle for independence from Mexico. Ironically, the state of Texas has made several attempts to exonerate itself from the United States since forming. These talks have surfaced recently as the state governs itself differently than most of the country. This has attracted tens of thousands of new residents to the state and just the past year and a half.

Texas FHA Loans For Bad Credit

Most first-time homebuyers in Texas choose FHA mortgages due to the lenient Texas FHA loan requirements on a low down payment, prior bad credit, little to no credit tradelines, higher debt to income ratios, and manual underwriting guidelines.

Families And Businesses Moving To Texas

What is attracting new residents to the state of Texas? Many say the weather. Others are migrating to Texas due to the low taxes, low cost of living, and affordable housing. The large size of Texas gives the state multiple climate zones and highly variable weather. The panhandle of the state has colder winters while the gulf coast has mild winters.

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Texas Mild Climate For New Texans From Other States

Snowfall happens in northern Texas most years but is usually very mild. Storms are quite frequent throughout the state of Texas.

Snowfall happens in northern Texas most years but is usually very mild. Storms are quite frequent throughout the state of Texas. Thunderstorms and tornadoes are very common in most of the state especially in north Texas and the panhandle. Hurricanes unfortunately are far too common in the southern region of the state and have crippled the Houston area numerous times in recorded history.

Texas Strong Economy And Job Opportunities For First-Time Homebuyers From Other High-Taxed States

Many Americans moved to Texas because of the state’s economy. Texas has the second-highest gross state product (GSP) in the country. In fact, the state of Texas has greater GDP than many countries such as Brazil, Russia, Canada, and Spain. The state’s median household income is $59,000.

Millions Of Americans Moving To Texas From High-Taxed Stats

Texas has a large population, which is still growing and expected to grow in the years to come, and an abundance of natural resources. They have many large cities such as Dallas, San Antonio, and Houston scattered throughout the state which creates numerous job opportunities.

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Strong And Growing Industries That Is Creating Thousands Of New Job Opportunities In Texas

The state of Texas has many agriculture and mining job opportunities. Texas has the most farms and highest acreage of farms in the United States. The state creates more revenue from livestock and livestock products than any other state in the nation. Texas leads the nation in the production of cattle, horses, sheep, goats, and hay which creates good-paying jobs. The energy sector is also booming in the state of Texas. Texas is known for its role in the oil and gas industry. They produce a lot of energy, and they also use a lot of energy.

New Job Opportunities In The Strong Expanding Technology Industries

There is also a large technology sector in the state of Texas. The Austin area is currently nicknamed “silicon hills” and the Dallas area is nicknamed “silicon prairie” because many high-end tech companies are located in these areas. Many Americans are familiar with the Lyndon B Johnson Space Center located in southeast Houston. Many programs by some major aviation companies such as space x and blue origin are located in the state of Texas.

Demand For Homes Due To Texas Population Growth

Between the US census of 2010 and 2020, Texas increased its population by 15.9%. Many believe this is due to taxation. Texas has also hight cost areas so if you are applying for an FHA loan you have to also check your FHA loan limits in Texas for the particular county you live in. Taxes as a whole have a low tax and a low service reputation. The state of Texas does not have a separate state income tax. However, the state will collect or tax through other taxation methods such as property tax and sales tax.

Movers Buying Versus Renting Due To Lenient Texas FHA Loan Requirements

The overall tax system in Texas is attracting tens of thousands of new individual taxpayers from high-taxed states such as New York, Connecticut, Massachusetts, Vermont, Rhode Island, and other states with high costs of living and high taxes. Texas has millions of dollars in reserves and is continuing to prospect. There are more opportunities for hard-working families in Texas than in other high-taxed states.

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Strong Texas Housing Market Expected To Continue

The current lockdowns are due to the coronavirus outbreak that started in February 2020 has been affecting many hard-working Americans. Lockdown requirements depend on each individual state. Texas may have seen the biggest boom of migration of Americans because of their lack of lockdowns and mandates surrounding the coronavirus outbreak.

Easy Texas FHA Loan Requirements For Homebuyers Moving To Texas

While this approach may scare some, it has attracted thousands of people moving to the state even after the census of 2020 was

While this approach may scare some, it has attracted thousands of people moving to the state even after the census of 2020 was completed. The state of Texas sees the value in freedom and letting people make their own choices. So the true population growth of the state is more than likely higher than the 2020 census recorded.

Texas FHA Loan Requirements On 500 Credit Scores

HUD allows borrowers with credit scores down to 500 FICO to qualify for FHA loans. Per HUD agency guidelines, borrowers with credit scores between 579 and 500 credit scores need a 10% down payment. Borrowers need a 580 credit score requirement to qualify for a home purchase FHA loan with a 3.5% down payment.

How Texas FHA Lenders Have Different Credit Requirements On FHA Loans

Most Texas mortgage companies require 620 credit scores. Why is this the case when HUD requires credit scores down to 500 FICO? Texas mortgage lenders can have higher lending requirements than the minimum agency guidelines of HUD which are called lender overlays.

Texas FHA Lenders With Lender Overlays On FHA Loans

Lender overlays are common among Texas FHA lenders. Mortgage companies can have lender overlays on just above anything and everything. Common lender overlays on FHA loans include credit scores, debt to income ratios, outstanding collections, charged-off accounts, late payments, credit tradelines, gift funds, co-borrowers, and dozens of other factors.

FHA Loan Requirements In Texas On FHA Loans With Bad Credit

The great news is Capital Lending Network, Inc. is a mortgage company licensed in Texas with no lender overlays on FHA loans. We do not have any lender overlays on FHA loans in Texas. We just go off the minimum agency Texas FHA loan requirements and have zero lender overlays.

Texas FHA Lenders With No Lender Overlays

Capital Lending Network, Inc. dba CLN Mortgage is one of the very few Texas FHA lenders that can approve and close borrowers with credit scores down to 500 FICO. Most Texas FHA lenders cannot do manual underwrites. 20% of our borrowers are folks who need manual underwriting on FHA and VA loans.

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How Do I Apply For FHA Loans In Texas With A Lender With No Overlays

The pre-approval process is the most important step of the mortgage process. The number one reason for a last-minute mortgage loan denial is due to the loan officer not qualifying the borrower correctly prior to issuing a pre-approval. Many loan officers do not look at income, credit disputes, errors on credit reports, employment history, and other important factors before issuing a pre-approval. The team at Capital Lending Network, Inc. takes the qualification and pre-approval of borrowers very seriously. You can rest assured that once you get pre-approved at Capital Lending Network, Inc. your loan will not just close but will close on time.

The Mortgage Loan Process At Capital Lending Network, Inc.

Our highly skilled team will walk you through the application process. First, reach out to Mike Gracz on 630-659-7644 or email contact@gustancho.com. Mike will talk to you about your credit, income, and asset qualifications. Assuming you meet the criteria, a licensed loan officer will send you an application link for Texas. At that point, you will need to upload the required documentation so your loan officer can complete the preapproval process. Then, you will be issued a pre-approval letter and are able to go out house shopping. If during the application process, there is an issue on your credit report or assets available that will not qualify you for an FHA loan, our team will give you a detailed financial plan to qualify as soon as
possible.

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Texas FHA Loan Requirements For Low Credit Scores And No Credit Tradelines Homebuyers

A large percentage of homebuyers in Texas are first-time homebuyers. Texas FHA loan requirements have very lenient agency mortgage guidelines for first-time homebuyers. Borrowers with no credit scores, bad credit, borrowers with credit scores down to 500 FICO, high-debt to income ratios, and recent college graduates with no work experience can qualify for an FHA loan in Texas.

Texas FHA Loan Requirements On Community Property State

The housing market in Texas is incredibly strong so your offer will need to stand out. Our team will work with your realtor directly to help you secure the home of your dreams. Our team will stay on top of all checkpoints throughout the mortgage process and keep all parties up to date. It is important to select a mortgage team that knows the ever-changing guidelines with FHA mortgage lending. Texas is a community property state so there are a few FHA requirements if you are married. Please call our team to discuss the ins and outs of FHA lending within a community property state.

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Lenient Texas FHA Loan Requirements And Guidelines With No Lender Overlays

The team at CLN Mortgage Group is available seven days a week and even on holidays to help you purchase your next home. We encourage you to reach out to our team today. Even if you’ve been turned down in the past, our no overlay platform may be able to help you! This holiday season could be a great time to enter the housing market. Feel free to call or text 630-659-7644 with any questions! Or email us at contact@gustancho.com. Capital Lending Network, Inc. are mortgage bankers with no lenders overlays on government and conventional loans with the ability to broker non-QM and alternative specialty mortgages.

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Start The Qualification And Pre-Approval Process Today

We have a national reputation of being a one-stop mortgage shop. If there is any loan program in today’s market, you can be rest assured Capital Lending Network, Inc. has it. Some of our specialty mortgage loan programs include no-doc home loans, 12-month bank statement loan programs, non-QM mortgages one day out of bankruptcy and foreclosure, asset-depletion mortgages, traditional 90% LTV jumbo mortgages, non-QM jumbo mortgages with 500 FICO, and dozens of other specialty mortgage loan programs for owner-occupant homes, second, homes, and investment properties. Over 75% of our borrowers at CLN Mortgage Group are folks who could not qualify at other lenders due to their lender overlays or due to getting a last-minute mortgage loan denial. Capital Lending Network, Inc. has a national reputation of being able to do loans other lenders cannot do.

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