Quick answer: An FHA loan can be a great fit for a first-time buyer in Texoma if you have a modest down payment or a credit score that isn't perfect. With a 580+ score you may qualify with 3.5% down. The catch: the house has to pass an FHA appraisal for safety and livability, so condition matters as much as your credit.
We talk with a lot of first-time buyers in Sherman, Denison, and Durant who have heard "FHA" from a friend or a lender and aren't sure what it actually means for them. The short version is that FHA financing is built to make buying easier, but it comes with two sets of rules: one for you and one for the house. Here's how both work, in plain language, as of early 2025.
What is an FHA loan, and who is it for?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD. The government doesn't lend you the money; it insures the lender, which lets lenders approve buyers they might pass on for a conventional loan. That typically helps:
- First-time buyers who haven't been able to save a large down payment
- Buyers rebuilding credit whose scores fall below conventional comfort zones
- Buyers with more monthly debt, since FHA guidelines often allow a higher debt-to-income ratio
If that sounds like you, our first-time home buyer guide for Texoma is a good companion to this post.
Do I qualify for an FHA loan?
Every lender adds its own overlays, so treat these as the general FHA framework, not a promise of approval.
| Your situation | General FHA guideline |
|---|---|
| Credit score 580 or higher | May qualify with a 3.5% down payment |
| Credit score 500–579 | May still qualify, usually with 10% down |
| Credit score below 500 | Generally not eligible for FHA |
| Past bankruptcy | Often possible about 2 years after discharge, with re-established credit |
| Past foreclosure | Often possible about 3 years after, with re-established credit |
| Minimum income | No set minimum, but income must be stable and documented |
What counts as income?
FHA looks for steady, verifiable income rather than a big number. Commonly accepted sources include:
- Wages from a job (lenders like to see a consistent work history)
- Self-employment income, usually documented with tax returns
- Child support or alimony that will continue
- Veterans' benefits
- Social Security payments
The fastest way to know where you stand is a pre-approval. If you don't have a lender yet, start with our Texoma preferred lenders and vendors list and ask each one about FHA.
Will the house I want meet FHA requirements?
This is the part that surprises people. Even if you're approved, the property has to pass an FHA appraisal. The appraiser checks that the home is safe, sound, and livable, not just what it's worth.
Which property types can use FHA?
- Single-family homes
- Duplexes, triplexes, and fourplexes, as long as you live in one of the units
- Condos in an FHA-approved project
- Manufactured homes on a permanent foundation that meet FHA guidelines
What can cause a home to fail an FHA appraisal?
- Peeling or chipping paint in homes built before 1978 (a lead-based paint concern)
- Broken windows or exterior doors
- Heating, plumbing, or electrical systems that don't work
- Roof damage or a roof near the end of its life
- Significant structural or foundation problems, major pest damage, or widespread mold
If the appraiser flags items, the repairs usually have to be completed before closing. Sometimes the seller is willing; sometimes they aren't, and that's where the deal can stall.
What should Texoma buyers know about FHA on older or rural homes?
Our area has a lot of charming older homes in towns like Denison and Sherman, plus plenty of rural properties across Grayson County and Bryan County. Both can work with FHA, but go in with eyes open:
- Pre-1978 homes: look closely at exterior paint, trim, and porches before you write an offer.
- Well and septic: rural homes often have private water and septic. Your lender may ask for water testing or other checks, so plan for extra time.
- Fixer-uppers: a house that needs real work may be a better match for a different loan or a renovation program. Ask your lender what they offer.
- Cash-leaning listings: if a listing hints that it's best for cash or investors, it may not pass FHA as-is.
If you're shopping at the entry level, browsing homes under $100K, homes $100K–$200K, and homes $200K–$300K is a good way to see what's out there. We can help you spot which listings are likely to pass FHA and which will need a different plan.
What are the pros and cons of an FHA loan?
| Pros ✅ | Cons ⚠️ |
|---|---|
| Low down payment (3.5% with a 580+ score) | Mortgage insurance premium (MIP), both upfront and monthly |
| More flexible credit guidelines | For most buyers putting less than 10% down, MIP stays for the life of the loan unless you refinance |
| Higher debt-to-income ratios often allowed | Property condition standards can rule out some homes |
| FHA loans are assumable, which can appeal to a future buyer | Loan limits apply by county and change every year |
FHA loan limits are set by county and updated annually, so check the current limit for the county you're buying in before you fall in love with a home near the top of your budget.
How do I shop for homes that will work with FHA?
- Get pre-approved first. Know your payment, not just your price.
- Favor move-in-ready homes. Fewer repair surprises means fewer appraisal issues.
- Tell your agent you're using FHA. We'll read listings and disclosures with that in mind.
- Use your inspection period well. An inspection is for you; the FHA appraisal is for the lender. You want both.
- Talk through repairs before you sign. If something obvious will likely be flagged, address it in the offer.
Want the full picture of how a purchase flows from offer to keys? Our Texoma home buying guide walks through it.
Frequently asked questions
What credit score do I need for an FHA loan?
Under general FHA guidelines, a 580 or higher score may qualify for 3.5% down, and 500–579 may qualify with 10% down. Individual lenders can set higher minimums, so ask yours.
Can I use an FHA loan on a house in the country?
Often, yes, as long as the home and property meet FHA standards. Well and septic properties may need extra testing or documentation, so build in time.
Do I have to be a first-time buyer to use FHA?
No. FHA isn't limited to first-time buyers, but the home generally has to be your primary residence.
Can the seller pay my closing costs on an FHA loan?
Seller concessions are allowed within FHA limits. Your lender can tell you the current cap and how it applies to your offer.
Related reading
- 10 home buying tips for new buyers in Texoma
- Affordable homes for sale in Durant, OK under $200K
- Contingencies when buying a home near Lake Texoma
- Types of septic systems: an Oklahoma buyer's guide
Not sure if FHA fits you or the house you have your eye on? We're happy to look at it with you and connect you with lenders who do FHA every day. Call or text Love My Texoma Home Team | INC Realty at (580) 217-7435.
