How much down payment do I need to buy a house in Texas?
How much you put down depends on the loan program, whether the home will be your homestead or an investment property, and what your lender's overlay requires. Conventional, FHA and VA each set different minimums, and a veteran with full entitlement has no VA loan limit. Only a lender preapproval gives you a real number.
The number is set by four things, in this order
- The loan program. Conventional, FHA, VA and USDA each have their own minimum. They are not close to each other, and a borrower is frequently eligible for more than one.
- What you are doing with the property. A primary residence, a second home and an investment property are underwritten as three different risks by every program that allows them at all. Occupancy is the single largest swing in the required down payment, larger than credit score.
- The lender's overlay. The program floor is what the agency will accept. The overlay is what the lender in front of you will actually do. Overlays are unpublished and vary between lenders on the same day.
- The property type. One unit versus two to four units, condominium versus single family, manufactured versus site-built — each moves the requirement.
Anyone who answers this question with a percentage before asking those four things is quoting a marketing number.
Homestead versus everything else in Texas
Texas has a specific legal category for the home you actually live in: the homestead. It is the basis for the residence homestead exemption on your property taxes, and it is the trigger for the constitutional limits on borrowing against your own house.
The homestead distinction shows up in three places a buyer feels:
- Financing terms. Owner-occupied financing is materially cheaper and requires less down than non-owner-occupied financing. Occupancy is a representation you make to the lender, in writing, under penalty. Telling a lender you will occupy a property you intend to rent out is mortgage fraud, not a strategy.
- Property taxes. A residence homestead exemption requires that you owned and occupied the home as your principal residence on January 1 of the tax year, and the application is filed before May 1 with the county appraisal district (Texas Comptroller). For a Boerne home that is the Kendall Appraisal District, not Bexar CAD — Boerne is in Kendall County, not the City of San Antonio.
- Getting equity back out later. A cash-out refinance or home equity loan on a Texas homestead is governed by the Texas Constitution, Section 50(a)(6): all loans against the homestead combined cannot exceed 80% of fair market value, meaning at least 20% equity must remain; the loan cannot close until at least 12 days after the later of application or your receipt of the required notice; fees other than appraisal, survey, title insurance premium and title search/exam are capped at 2% of principal; the loan is generally non-recourse; and you may have only one at a time, with 12 months between home equity closings (Texas cash-out rules summarized).
That last point is the one buyers in other states get wrong. If your plan is to put very little down and then pull cash out in two years, Texas law caps the total at 80% of value on the homestead. Investment property in Texas is not governed by 50(a)(6).
The VA case is genuinely different
A veteran with full entitlement has no VA loan limit, and the VA guaranty does not exceed 25% of the loan (U.S. Department of Veterans Affairs). "No limit" means the VA does not cap the loan amount for a veteran with full entitlement — it does not mean a lender will lend any amount. The lender still underwrites income, assets, credit and the appraisal.
Entitlement is not automatically full. A veteran with an existing VA loan, or one who previously had a VA loan foreclosed on, may have partial entitlement, and that changes the math. The Certificate of Eligibility settles it, and the lender pulls it.
What has to be in the bank besides the down payment
The down payment is one of four cash requirements, and buyers routinely budget for only the first.
Option fee and earnest money. In Texas both are due early. The option fee goes to the escrow agent — the title company, not the seller — within three days after the effective date of the contract, and if day three falls on a weekend or legal holiday it rolls to the next business day (TREC). Earnest money goes to the same escrow agent. The option fee is credited to the sales price at closing; it is not refunded if you terminate. Amounts are negotiated, not set by law.
Inspection and due diligence costs. Paid out of pocket during the option period, before you know whether you are buying the house. On a Hill Country property that can mean a general inspection plus a septic inspection, a well test, and a structural or foundation opinion. None of it is financed.
Closing costs. Separate from the down payment. Who pays what is negotiated in the contract, not fixed by law. Custom in much of Texas is that the seller pays for the owner's title policy; in some markets the buyer does. Texas title insurance premium rates are promulgated by the Texas Department of Insurance, which means the premium for a given policy amount is identical at every title company in the state — you are not going to shop your way to a cheaper policy (TDI title rates, schedule effective March 1, 2026).
Reserves. Many loan programs and most lender overlays require documented reserves after closing — months of principal, interest, taxes and insurance still sitting in an account. A borrower who drains every account to hit the down payment can fail the reserve test and lose the approval.
Gift funds, and the paper trail
Gift funds are allowed on most programs, with conditions: an acceptable donor relationship, a gift letter stating the funds do not have to be repaid, and a documented transfer. The failure mode is almost never the gift itself. It is the paper trail — cash deposited at a branch, money moved between three accounts before it lands, or funds appearing after the application without an explanation. Underwriters call these unsourced deposits and they will stop a file cold. Move money once, in a traceable way, and tell the loan officer before you do it.
Why a real preapproval is the only number worth planning around
A calculator on a lender's website does not know your debt, your documented income, the property, or that lender's overlay. A preapproval where credit has been pulled and income and asset documents have actually been read produces a number you can plan against, and a letter a listing agent will take seriously. On the contract side, a buyer whose purchase depends on financing uses the Third Party Financing Addendum, TREC form 40-11, effective 01/03/2025 (TREC contract forms). That addendum and your preapproval are what the seller's side weighs against the other offer on the table.
Who to ask
Program minimums, overlays, entitlement, reserve requirements and what your specific file supports are lender questions. Homestead exemption filing and deadlines go to the Kendall Appraisal District for a Boerne or Kendall County property. How the Texas homestead rules apply to your ownership situation, including anything involving marital property or title, is a question for a Texas real estate attorney.
Related questions
- What credit score do I need to buy a house in Texas?
- Conventional vs. FHA vs. VA loan in Texas: which one?
- What are the 2026 conforming and FHA loan limits in Kendall County, Texas?
- Who pays closing costs in Texas?
- What is a Texas cash-out refinance (50(a)(6))?
Questions about a specific property?
Call or text 830-446-3847 · Email heath.shepard@kw.com
This page explains how down payment requirements are structured in Texas. It is not lending, legal or tax advice. A licensed lender determines what your file qualifies for; the Kendall Appraisal District handles homestead exemptions; a Texas real estate attorney handles title and homestead law.