What Is the Minimum Down Payment for a Home in Austin? (2026 Guide)

I’m Clay Byrne, founder of Byrne Real Estate Group, and I’ve been helping people buy homes in Austin for 29 years. The 20% myth still keeps a lot of good buyers renting longer than they need to. Here’s what the minimums actually are in 2026, how much cash that means at today’s prices, and the programs that can help cover it.

Minimum Down Payment by Loan Type (2026)

Example amounts use the Austin-Round Rock-San Marcos median sale price of $412,000 for August 2026 (Unlock MLS). Down payment only; closing costs are separate.

VA loans: 0% down

With full entitlement, VA loans have no down payment and no loan limit. VA doesn’t set a minimum credit score (lenders do), there’s no monthly mortgage insurance, and the VA funding fee is waived for veterans receiving VA disability compensation. Texas veterans can also look at the Texas Veterans Land Board home loan program, which offers loans up to $832,750 with little or no down payment.

USDA loans: 0% down, outside the city

USDA loans offer 100% financing in eligible rural areas, with a 1% upfront guarantee fee, a 0.35% annual fee and household income limits. Portions of Bastrop and Caldwell counties and outlying parts of Travis, Williamson and Hays counties may qualify, but eligibility is address by address. Check the specific home on the USDA eligibility map.

Conventional loans: 3% down

There are three ways to get to 3% down on a conventional loan:

• Fannie Mae 97% LTV: at least one borrower must be a first-time buyer. No income limit.
• Fannie Mae HomeReady: income at or below 80% of area median income. First-time buyer status isn’t required, and mortgage insurance coverage is reduced.
• Freddie Mac Home Possible: also for incomes at or below 80% of area median income, with no universal first-time buyer requirement.

You’ll pay private mortgage insurance (PMI) until you reach 20% equity. Freddie Mac estimates PMI at roughly $30 to $70 a month per $100,000 borrowed, depending on your credit and down payment. You can ask to cancel it at 80% loan-to-value, and it ends automatically at 78%. The 2026 conforming loan limit in Travis, Williamson and Hays counties is $832,750.

FHA loans: 3.5% down

FHA requires 3.5% down with a credit score of 580 or higher, or 10% down at 500 to 579. FHA charges a 1.75% upfront mortgage insurance premium (usually rolled into the loan) and an annual premium, typically 0.55% with 3.5% down, for the life of the loan. FHA loan limits are set by county; for 2026 the national floor is $541,287. Check your county on HUD’s loan limit lookup.

Down Payment Assistance in Austin (2026)

This is where a lot of buyers leave money on the table. These are the main programs available to Austin-area buyers:

First-time buyers using TSAHC can also add a Mortgage Credit Certificate, a federal tax credit worth 15% of the mortgage interest paid each year. Program rules, funding and limits change, so confirm current terms with the lender before you write an offer.

How Much Cash Do You Really Need to Close?

Your down payment is only part of it. Plan for closing costs of roughly 2% to 5% of the price in Texas, which cover lender fees, title, escrow, prepaid taxes and insurance. On a $412,000 home, that’s roughly $8,000 to $20,000. The good news is that Texas has no transfer tax, and by custom the seller pays for the owner’s title policy.

In today’s Austin market, sellers are also often willing to help. Homes in the metro closed at 93.2% of list price on average in August 2026, with 5.1 months of inventory, so there’s real room to negotiate. Loan programs cap how much a seller can contribute:

Put together, a first-time buyer using FHA with 3.5% down, a 5% assistance program and a seller paying closing costs can sometimes buy with very little of their own cash. Every file is different, which is why it pays to run the numbers before you start touring.

Should You Put Less Down or More?

A smaller down payment gets you into a home sooner and keeps cash in the bank for emergencies, repairs and furniture. A larger one lowers your payment and your mortgage insurance. For most first-time buyers I work with, the right answer is the smallest down payment that still leaves a comfortable monthly payment and a healthy cushion. Rates have been around 7% on a 30-year loan in September 2026 (Freddie Mac), so it’s also worth asking about seller-paid rate buydowns, which many Austin sellers are offering right now.

Want to see what your payment would look like? Try our mortgage calculator, or read our guide to the best Austin areas for families to see where your budget goes furthest.

I post about the Austin market and buying strategy on Facebook every day. Follow along if you want the local take as things change.

Down Payment FAQ

What is the minimum down payment to buy a house in Austin?

It depends on the loan. VA and USDA loans allow 0% down for eligible buyers. Conventional loans allow as little as 3% down through Fannie Mae’s 97% LTV option, HomeReady or Freddie Mac’s Home Possible. FHA loans require 3.5% down with a 580 or higher credit score, or 10% with a score of 500 to 579. At Austin’s August 2026 metro median price of $412,000, 3.5% down is about $14,420.

Do I need 20% down to buy a home in Austin?

No. Twenty percent down lets you avoid mortgage insurance on a conventional loan, but it isn’t required. According to Clay Byrne of Byrne Real Estate Group, many Austin buyers put down 3% to 10% and use down payment assistance or seller concessions to cover the rest of their cash to close.

Is there down payment assistance in Austin?

Yes. The City of Austin’s Down Payment Assistance program offers up to $40,000 to eligible first-time buyers at or below 80% of median family income buying inside city limits (check current funding with Austin Housing). Statewide, TDHCA’s My First Texas Home and My Choice Texas Home offer 2% to 5% of the loan amount, and TSAHC’s Home Sweet Texas and Homes for Texas Heroes offer up to 5%, some as grants.

How much cash do I need to close on a house in Austin?

Plan for your down payment plus closing costs, which typically run about 2% to 5% of the price in Texas. On a $412,000 home with 3.5% down, that’s roughly $14,420 down plus about $8,000 to $20,000 in closing costs and prepaids, before any seller concessions or assistance. Byrne Real Estate Group regularly negotiates seller-paid closing costs in today’s Austin market.

Can the seller pay my closing costs in Texas?

Yes, within loan limits. FHA allows seller concessions up to 6% of the price, VA up to 4% of the loan (normal closing costs and discount points don’t count toward that), USDA up to 6%, and conventional loans 3% with less than 10% down, 6% with 10% to 25% down and 9% with more than 25% down.

What credit score do I need for a low down payment loan?

FHA allows 3.5% down with a 580 score. Fannie Mae removed its minimum credit score in Desktop Underwriter in November 2025, but most lenders still require about 620 for conventional loans. Texas assistance programs from TDHCA and TSAHC generally require 620 or higher.

This article is for general educational purposes and is not a commitment to lend or an offer of credit. Loan programs, down payment assistance, income and price limits, and mortgage insurance terms are subject to change and to borrower and property eligibility. Sources: Fannie Mae, Freddie Mac, HUD, VA, USDA Rural Development, FHFA, TDHCA, TSAHC, City of Austin Housing, Travis County HFC, Texas Veterans Land Board, Unlock MLS (August 2026) and Freddie Mac PMMS (week of Sept. 24, 2026). Photo from Wikimedia Commons under the license noted. Buyer’s Rate Mortgage NMLS #2565699. Equal Housing Lender.