First-time home buyer guide for Houston
Everything you need to know before you write your first offer.
Houston is one of the friendliest US cities to buy your first home: no zoning means more inventory, no state income tax, and median prices well below the national average. But the rules changed in 2024-25 and most online guides are out of date. Here is what to actually do.
How much house can I afford in Houston?
Rule of thumb: total monthly housing cost (principal + interest + tax + insurance + HOA) should be under 30% of gross monthly income. Houston property tax is high (~2.3% of assessed value annually) which makes the tax line bigger than buyers from other states expect. A $400K home runs about $700/mo in property tax alone. Use a real Texas-specific calculator, not a generic one.
What credit score do I need?
620 is the floor for conventional. 580 for FHA. 740+ unlocks the best rates. If you're under 700, spending 3-6 months improving your score before buying often beats house-hunting now. Pay down credit card balances to under 30% of limit, do not open or close anything new.
What's the down payment situation?
Conventional minimum is 3%. FHA is 3.5%. Texas has multiple down-payment assistance programs (TSAHC, TDHCA My First Texas Home) that can cover 5% in the form of a grant or second loan. If you're a Houston ISD employee, firefighter, EMS, or teacher, there are city-specific programs. Always check before assuming you need 20%.
Get pre-approved, not pre-qualified
Pre-qualification is a soft estimate based on what you tell the lender. Pre-approval means the lender pulled your credit, verified income/assets, and is committing to a loan amount in writing. Houston sellers will not look at offers from buyers who only have pre-qualification. Get pre-approved from at least 2 lenders to compare rates and credits.
Property tax surprise
Houston (Harris County) property tax averages around 2.3% of assessed value. Some MUDs (Municipal Utility Districts) in master-planned suburbs push effective rate to 3.0-3.4%. Always pull the tax record for any home you're seriously considering. The MLS list price line never tells you the tax bill.
Flood zone reality check
Houston floods. Period. Anything south of I-10 or near a bayou should have an elevation certificate pulled before you offer. Flood insurance can be $400-2,400/year depending on zone. Lenders require it in Zone AE. Some homes in apparently-safe zones have flooded too. Ask the listing agent for the past-5-year flood history. If they won't share it, that's a red flag.
MUD vs. city vs. ETJ
Inside the City of Houston: city services, no MUD tax, but higher city tax rate. In a MUD (most Katy, Cypress, parts of Memorial): lower base tax but you pay for water, sewer, and infrastructure through the MUD assessment. ETJ (Extraterritorial Jurisdiction): even fewer services. Read the tax breakdown line by line.
Inspection contingency: don't waive it
In a hot market, buyers waive the inspection contingency to win offers. Don't, on your first home. Hire your own inspector ($400-600), get a full report, and use the contingency to negotiate fixes or a credit. Pay for an HVAC and plumbing scope too if the home is older than 15 years.
Closing costs in Texas
Plan for 2-4% of purchase price in closing costs (title insurance, lender fees, escrow, surveys, doc prep, first-year homeowners insurance, property tax pro-ration). Some can be negotiated as seller concessions. Your lender's Loan Estimate breaks it all out. Read it line by line.
First-year homeowner mistakes to avoid
1. Skipping the homestead exemption (Texas caps assessed-value growth at 10%/year once you file, so file the first year). 2. Over-improving before you live in the house long enough to know what you actually need. 3. Refinancing too early (most loans charge prepayment fees in year 1; wait until rates drop at least 0.75% to justify costs). 4. Ignoring HOA documents (read the bylaws, financials, and special-assessment history).