Financing guidance for building a custom home in Texas

Yes. FHA is one of the most common paths for first time builders here because it needs only 3.5% down and has more flexible credit requirements than conventional financing.

For a new build you would typically use an FHA construction to permanent loan, a one time close that funds construction and converts to a standard FHA mortgage at completion, so you avoid a second closing. FHA generally looks for a 580 credit score at 3.5% down, or 500 to 579 with 10% down, and the home must meet FHA property standards. We will connect you with a local FHA lender who does construction regularly.

All the major construction financing programs available in Texas. FHA: 3.5% down, flexible credit. VA: zero down for eligible veterans, active duty service members and surviving spouses. Conventional: typically 10 to 20% down, often the best long term rate. One time close construction loans: cover the build and the permanent mortgage in a single loan. USDA Rural Development: zero down in eligible rural areas.

Which one fits depends on your credit, your down payment and where your lot sits. We will help you narrow it before you meet a lender.

Yes, and for those who qualify it is usually the strongest option: zero down payment, no private mortgage insurance, competitive rates, and the ability to finance construction and the permanent mortgage in a single one time close.

You will need your Certificate of Eligibility, the home must be your primary residence, and it must meet VA minimum property requirements. Not every lender offers VA construction financing, so the introduction matters, we work with local lenders who handle VA new construction routinely.

A construction loan funds the build in stages called draws, released as milestones are completed and inspected. You qualify based on credit, income and the appraised value of the finished home; you close once blueprints and selections are final; the lender then releases funds directly to the builder at each milestone.

During construction you typically pay interest only on the funds drawn so far, which keeps payments low while the house goes up. With a one time close, the loan converts automatically to a permanent mortgage at completion. With a two time close, you refinance at the end.

It depends on the program. FHA: 580 or above for 3.5% down, 500 to 579 with 10% down. VA: no official minimum, though most lenders want 580 to 620. Conventional: 620 minimum, with the best rates at 740 and above. USDA: typically 640. Construction loans: usually 620 to 680 depending on the lender.

If you are below those numbers today, that is a timeline question rather than a closed door. Paying down card balances, disputing errors and avoiding new debt can move a score meaningfully in three to twelve months, and the lenders we work with will tell you specifically what to fix first.

We do not originate loans, but we make the introduction and prepare you for it. We will point you to the right lender for your program, explain which documents to bring, and tell you what to expect from the conversation.

Pre approval usually takes one to three business days with a local lender and costs nothing. It is the single most useful first step, because it replaces a guess about your budget with a number we can design against.

It depends on the loan program. FHA construction loans need a minimum 3.5% down, about $8,750 on a $250,000 build. Conventional construction loans typically want 10 to 20%, so $25,000 to $50,000 on the same build. VA loans require no down payment for qualifying veterans and active duty service members. USDA loans require no down payment in eligible rural areas.

Beyond the down payment, plan for three to six months of reserves and closing costs of roughly 2 to 5% of the loan amount. We can introduce you to Valley lenders who close construction loans regularly and can prequalify you in a few days.