FHA Loan Limits in Austin: What Changed for 2026 Buyers
Each year, the U.S. Department of Housing and Urban Development (HUD) sets loan limits for FHA-insured mortgages by county. For 2026, those limits increased, and in Travis County (Austin), the new single-family FHA loan limit is $563,500. That number matters if you are planning to use an FHA loan to buy a home in the Austin metro this year.
Austin’s median home price sits near $460,000 as of May 2026 (Austin-Area MLS). With the FHA limit at $563,500, FHA financing is now available across a much larger portion of the Austin market than in prior years, including some entry-level and mid-market single-family homes, townhomes, and some condos. Here is what the limit change means for buyers in practical terms.
What Is an FHA Loan Limit?
An FHA loan limit is the maximum mortgage amount that the Federal Housing Administration will insure in a given county. Lenders who make FHA loans rely on that government backing to offer lower down payment requirements and more flexible credit standards. Without the backing, they would take on too much risk at those terms.
HUD sets limits annually based on area median home prices and a national floor and ceiling. For 2026, HUD’s Mortgagee Letter 2025-20 set a new floor of $524,225 for most areas and raised high-cost limits in metros like Austin-Round Rock. Travis County reached $563,500 for single-family homes.
Williamson County (Cedar Park, Round Rock, Georgetown) and Hays County (Kyle, Buda, Wimberley) have similar limits for 2026, reflecting the broader Austin metro’s elevated median prices. Check HUD’s official FHA mortgage limits search tool for the specific county you are targeting.
What the $563,500 Limit Means for Austin Buyers
With the 2026 FHA loan limit at $563,500 for Travis County, buyers can use FHA financing on homes priced up to roughly $584,975 with the minimum 3.5% down payment (since 3.5% of the purchase price must come from the buyer, and $584,975 x 0.965 = $563,500). Below that purchase price, FHA is a viable option if you meet the other qualification requirements.
At Austin’s current median of $460,000, a buyer using FHA at 3.5% down would bring $16,100 to closing for the down payment, plus closing costs. For comparison, a conventional 3% down option requires $13,800 but typically requires a stronger credit profile. Our comparison of FHA vs. conventional loans for Austin buyers covers this tradeoff in detail.
With Austin still carrying over 16,400 active listings (Austin-Area MLS, May 2026), many sellers are open to FHA-backed offers. The concern in prior years that sellers would not accept FHA offers has softened in a market with more inventory.
FHA Requirements Buyers Should Know
The expanded loan limit does not change the other requirements for FHA eligibility. Here is what lenders will look at:
- Credit score: 580 or higher for the 3.5% down payment option. Scores between 500 and 579 require 10% down. Below 500 is ineligible.
- Down payment: Minimum 3.5% with a 580+ score. All funds must be sourced and documented.
- DTI (debt-to-income ratio): FHA allows up to 57% in some cases, though most lenders prefer 50% or below. This is more flexible than most conventional loan programs.
- Primary residence only: FHA loans are for owner-occupied properties. You cannot use an FHA loan to buy an investment property or second home.
- Property condition: The home must meet HUD’s Minimum Property Standards. Very distressed properties may not pass the FHA appraisal.
Understanding FHA Mortgage Insurance
FHA loans require two types of mortgage insurance premium (MIP), a fee that funds the FHA program and compensates lenders if a borrower defaults.
The first is an upfront MIP of 1.75% of the loan amount. On a $400,000 loan, that is $7,000. It is typically rolled into the loan rather than paid at closing, so it gets added to the balance and paid over time with interest.
The second is an annual MIP, currently 0.55% for 30-year loans with less than 10% down. On a $400,000 loan, that works out to about $183 per month in the first year, decreasing slightly as the balance reduces. For borrowers with less than 10% down on a 30-year FHA loan, annual MIP stays for the life of the loan. Borrowers who put down 10% or more can remove MIP after 11 years.
This is one of the main factors buyers weigh when comparing FHA against conventional options. Conventional loans with private mortgage insurance (PMI) cancel automatically when you reach 20% equity. FHA MIP requires more planning to remove. See our guide on PMI and MIP explained for a breakdown of both.
FHA and Condos in Austin
FHA financing for condos in Austin requires the condominium project to be FHA-approved. This is a separate approval process that HUD maintains at the project level, not the unit level. Many Austin condo developments are not on the approved list, which limits options for FHA buyers who want to buy in a high-rise or established condo building.
There is an exception: FHA spot approval allows individual units in non-approved projects to qualify for FHA financing under certain conditions, including a maximum of 10% FHA-financed units in the building. Ask your loan officer whether a specific condo project qualifies before you make an offer.
How to Get Started
If you are planning to use FHA financing in the Austin metro for a 2026 purchase, the first step is a full pre-approval. Getting pre-approved before you start looking lets you move quickly when you find the right home.
For a list of what documents you will need, our post on the first five documents your loan officer needs covers the basics. The process is straightforward when you have your paperwork organized in advance.
Frequently Asked Questions
What is the FHA loan limit for Travis County in 2026?
The single-family FHA loan limit for Travis County is $563,500 for 2026, per HUD Mortgagee Letter 2025-20 (effective for FHA case numbers assigned on or after January 1, 2026). This applies to Austin and surrounding areas within Travis County. Williamson and Hays Counties have similar limits; check HUD’s official lookup tool for the most current figures.
Can I use an FHA loan on a condo in Austin?
FHA loans for condos require the condo project to be on HUD’s approved list, or the unit may qualify under FHA’s spot approval process. Many Austin condo developments are not on the approved list. Ask your loan officer to check before you write an offer on a condo, since discovering ineligibility during the contract period creates complications.
How much is the FHA mortgage insurance premium?
FHA loans carry two types of mortgage insurance: an upfront premium of 1.75% of the loan amount (typically rolled into the loan) and an annual premium of approximately 0.55% for 30-year loans with less than 10% down. On a $400,000 loan, the annual premium is about $183 per month in year one. For loans with less than 10% down, the annual premium stays for the life of the loan.
Can I get an FHA loan with a 580 credit score in Austin?
Yes. FHA allows a minimum 580 credit score with the standard 3.5% down payment requirement. Scores between 500 and 579 require 10% down. Lenders also look at your overall financial picture, including DTI and payment history, so a 580 score does not guarantee approval but it meets the FHA minimum. Subject to credit, income, and property qualification.
Do FHA loan limits vary by county in Texas?
Yes. FHA limits vary by county based on local median home prices. Higher-cost metros like Austin-Round Rock, Dallas-Fort Worth, and Houston have higher limits than rural Texas counties. For 2026, Travis County is at $563,500 for a single-family home. Rural Texas counties are often at the national floor of $524,225. Always verify the specific limit for the county where you are buying.
How does an FHA loan compare to a conventional loan in Austin?
FHA loans offer lower minimum credit score requirements (580 vs. 620 for conventional) and allow higher DTI ratios. The tradeoff is mortgage insurance: FHA MIP stays for the life of the loan if you put down less than 10%, while conventional PMI cancels automatically when you reach 20% equity. Buyers with stronger credit who can qualify for conventional often find it cheaper long-term. See our full comparison of FHA vs. conventional loans for side-by-side numbers.
If you are ready to explore whether an FHA loan is the right fit for your Austin home purchase, schedule a discovery call and we will walk through your numbers together. No pressure, no commitment, just clarity.
Ferrando Financial LLC | NMLS# 2403080 | Licensed in Texas. This content is for educational purposes only and does not constitute a commitment to lend. Loan approval is subject to credit, income, and property qualification. Sources: U.S. Department of Housing and Urban Development (HUD), Mortgagee Letter 2025-20; Austin-Area MLS, May 2026.
