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 But the rules changed in 2024-25 and most online guides are out of date.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. In a competitive Houston market, most sellers won't seriously consider 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 and natural-hazard 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).