Can You Use an FHA Loan to Buy New Construction in Texas?

Yes, you can use an FHA loan to purchase a newly constructed home in Texas. FHA loans aren't limited to older properties. As long as the builder follows proper guidelines and the property meets FHA standards, you may be eligible to finance a brand-new home with an FHA loan.

This applies whether you're buying a home already built by a developer or planning to build your own home from the ground up.

Two FHA Paths for New Homes

1. Buying a Newly Built Home

If you’re buying a new home that’s already been built or is nearing completion, a standard FHA purchase loan may apply. The home will need to pass an FHA appraisal, meet safety and structural standards, and include certain builder documentation, such as permits and warranties.

2. Building Your Own Home

If you plan to build a home from scratch, you may qualify for an FHA construction-to-permanent loan. This type of loan allows you to finance both the construction phase and the final mortgage in one transaction.

Bethany Ashby explains on easttexaslending.com/home that this process requires more documentation, including contractor licenses, project plans, and detailed budgets. Working with a lender experienced in FHA construction financing is key to staying on track.

FHA Requirements for New Construction

To be eligible, the home must meet the following FHA conditions:

• Built by a licensed and approved contractor

• Meet local building codes and FHA minimum property standards

• Pass an FHA appraisal

• Be covered by a builder’s one-year warranty

Buyers may also need to provide inspection reports at various construction stages if building the home.

Benefits and Challenges of Using FHA for New Homes

Advantages:

• Low down payment (3.5% for qualifying borrowers)

• Flexible credit requirements

• One loan for both construction and permanent financing (if building)

• Can be paired with local down payment assistance programs

Challenges:

• More inspections and documentation required

• Not all lenders offer FHA construction loans

• Builders must be approved and follow FHA-specific guidelines

• The process can take longer than a traditional resale purchase

Bethany Ashby emphasizes that it’s important to start early if you're considering new construction with an FHA loan. Getting pre-approved and aligning with an FHA-approved builder are crucial steps in the timeline.

Final Thoughts

Yes, FHA loans can be used to buy or build a new construction home in Texas. Whether you’re purchasing from a developer in DFW or building on your own land in East Texas, FHA financing is an option — but it does come with extra steps.

Bethany Ashby helps buyers navigate FHA rules, construction timelines, and approval checklists so they can move into their new homes with confidence. Visit easttexaslending.com/home to get started with expert guidance.