Credit Score Requirements for Texas DPA: What You Need

Let's Talk About Your Credit Score

If you've been looking into buying a home in Texas with down payment assistance, you've probably run into a bunch of confusing information about credit scores. Some sites say you need a 640. Others say 620. A few mention 580 but don't explain what that actually means for you.

So let me cut through the noise and tell you exactly what you need to know.

The short version? Two different rulebooks are in play. FHA ties its 3.5% minimum down payment to a 580 score (its rules allow 500 to 579 only with at least 10% down, and many lenders won't go that low). TDHCA and TSAHC set their own minimum for the assistance, 620 (TSAHC asks 640 on a conventional loan), and you have to meet both. Above that, a higher score mostly changes how your loan is priced. Let's break this down.

The Two Numbers That Matter: 580 and 620

Here's how credit scores work with Texas down payment assistance programs:

580 to 619: You meet the score FHA sets for its 3.5% minimum down payment, so an FHA first mortgage may still be possible with a lender that works in this range. TDHCA and TSAHC assistance isn't, because their minimum is separate from FHA's and a lender can't override it. In this band you're looking at FHA without state assistance, or a plan to raise your score first.

620 and above: This is where the state programs open up. All four major Texas DPA programs, both TDHCA and TSAHC offerings, become possible, subject to each one's income, price and loan-type rules (TSAHC asks for 640 on a conventional loan, and lenders can add their own requirements). Lenders generally price the loan more favorably at this level, and the process tends to be smoother.

660 and above: Now you're in prime territory. You might qualify for conventional loans with DPA through TSAHC programs, which can mean mortgage insurance you can eventually cancel, unlike most FHA loans.

See how this works? It's not a yes-or-no thing. It's a spectrum.

Why 620 Is the Real Target

Look, I'm not trying to discourage anyone with a 585 credit score from buying a home. We help people in that range all the time, sometimes with an FHA loan that doesn't use state assistance and sometimes with a plan to get past 620 first. But I want to be honest with you about what you're dealing with.

When your score is below 620, here's what typically happens:

TDHCA and TSAHC assistance isn't available, whatever FHA allows
Your loan will be priced higher, sometimes by a lot
The underwriting process can be more intensive
You might face additional conditions or requirements

When your score hits 620, things shift:

You meet the starting credit floor for TDHCA and TSAHC assistance
All four major Texas programs are on the table, subject to each one's income, price and other rules
Pricing on the first mortgage usually improves
The whole process tends to move faster

Is the difference between 618 and 620 really that dramatic? Honestly, yes. It's the line the assistance programs draw, and two points on the wrong side of it means no TDHCA or TSAHC assistance.

What's Included in Your Credit Score?

Before we go further, let's make sure we're talking about the same thing. When lenders pull your credit for a mortgage, they're looking at your FICO score. But not just any FICO score. Mortgages use specific versions:

Equifax: FICO Score 5
Experian: FICO Score 2
TransUnion: FICO Score 4

These are older versions of the FICO model. So that score you see on Credit Karma or your credit card app? That's usually a VantageScore or a different FICO version. It might be 20, 30, or even 50 points different from what a mortgage lender sees.

Why does this matter? Because people come to us all the time saying "I have a 650 credit score" and then we pull their mortgage credit and it shows 615. Or vice versa, someone thinks they have a 590 and they actually have a 625. You won't know your real mortgage score until a lender pulls it.

The Three-Score Middle Method

Here's another thing most people don't know. Mortgage lenders pull all three bureaus and then use your middle score. Not the highest, not the lowest, not the average. The middle one.

So if your scores are:

Equifax: 612
Experian: 628
TransUnion: 619

Your qualifying score is 619. Close to that 620 threshold, but not quite there.

And if there are two borrowers on the loan? We use the lower of the two middle scores. So if your spouse has a middle score of 595 and yours is 650, the qualifying score for the loan is 595.

This catches a lot of couples off guard. Sometimes it makes sense for only one person to be on the mortgage if the other has significantly lower credit. Your loan officer can help you figure out the best approach.

How Credit Scores Affect Your Interest Rate

Let's talk money. Your credit score directly affects how your loan is priced, and even small differences add up over the life of a loan.

Here's the general pattern (this shows direction only, not current pricing):

Credit Score	How Pricing Tends to Move
760+	Most favorable pricing tier
700-759	Slightly higher
680-699	Moderately higher
660-679	Noticeably higher
620-659	Higher still
580-619	Highest-priced FHA tier

To see what that means for you, ask your loan officer to price the same loan at your current middle score and again at the next score band up. Then take the monthly payment difference and multiply it by the number of months you expect to keep the loan. That's a payment comparison, not a complete borrowing-cost calculation (it leaves out things like closing costs and a future refinance), but it shows what the lower score is costing you in payments.

So while an FHA loan at a 585 score is possible on its own, you'll pay more for it, and you won't have TDHCA or TSAHC assistance to help with the down payment. Sometimes that's the right call because waiting costs you too, with rising rents, rising prices, and years of not building equity. But it's a decision you should make with your eyes open.

What Hurts Your Credit Score the Most?

If you're trying to improve your score before buying, focus on these factors in order of importance:

Payment history (35% of your score): Late payments hurt the most. A single 30-day late payment can drop your score 50-100 points depending on your overall profile. Recent late payments hurt more than old ones.

Credit utilization (30% of your score): This is how much of your available credit you're using. If you have $10,000 in total credit limits and you're carrying $7,000 in balances, that's 70% utilization. That kills your score. Aim for under 30%, and under 10% is even better.

Length of credit history (15% of your score): Older accounts help. This is why you shouldn't close old credit cards, even if you don't use them.

New credit (10% of your score): Applying for new credit causes hard inquiries that temporarily ding your score. Multiple applications in a short period can add up.

Credit mix (10% of your score): Having different types of credit (cards, installment loans, etc.) helps slightly, but don't open new accounts just for this.

Quick Wins to Boost Your Score

If your score is close to a threshold, like 615 when you need 620, here are some things that can help relatively quickly:

Pay down credit card balances. This is the fastest way to move your score. If you're carrying high balances, paying them down can bump your score within 30 days. Some people see 20, 30, even 40 point jumps just from reducing utilization.

Don't close accounts. Even if you've paid off a card, keep it open. The available credit helps your utilization ratio.

Become an authorized user. If a family member has an old credit card with perfect payment history and low utilization, being added as an authorized user can help your score. You don't even have to use the card.

Dispute errors. Pull your credit reports from annualcreditreport.com and look for mistakes. Accounts that aren't yours, incorrect late payments, wrong balances. Disputes can sometimes result in score improvements.

Don't apply for new credit. Every application creates a hard inquiry. If you're about to buy a house, put the credit applications on hold.

What If My Score Is Below 580?

Okay, real talk. Under 580, you've dropped below the score FHA requires for its 3.5% minimum down payment, and well below the 620 the state assistance programs start at. FHA's rules do allow scores from 500 to 579 with at least 10% down, but many lenders don't offer that, so for most buyers here it means doing some work first.

Here's the typical game plan:

Get a clear picture of your credit. Pull your reports, see what's dragging you down.
Address the biggest issues. Collections? Late payments? High balances? Prioritize what's hurting the most.
Work with a lender who can guide you. We do this all the time. We'll tell you exactly what needs to happen and approximately how long it'll take.
Set a realistic timeline. Sometimes it's 3 months. Sometimes it's 6. Sometimes it's a year. Depends on your specific situation.

The point is, a low score doesn't mean never. It means not yet.

What a 580 Score Can and Can't Do

I don't want to scare anyone away if 580 is where you are. Here's the truth: 580 is the score FHA requires for its 3.5% minimum down payment. That's FHA's rule. It doesn't change the TDHCA or TSAHC minimum, so at 580 the state assistance can't cover that 3.5%.

That means buying at 580 usually looks like an FHA loan with the 3.5% coming from your savings, an acceptable gift, or another source the loan allows, plus closing costs, earnest money and an inspection.

The trade-offs:

Higher pricing on the first mortgage than someone at 680 would see
Fewer loan types to choose from (conventional mortgage insurance gets expensive at lower scores, which is why most 580 buyers use FHA)
Some lender overlays might apply (individual lenders can add their own requirements)
No TDHCA or TSAHC assistance until your score reaches their minimum

If you can cover the down payment and the full house payment at your current score fits your budget, buying now may still make sense. If not, getting past 620 first opens the assistance and usually better pricing too.

How We Help at Cook Brothers Mortgage Team

Here's what we do when someone comes to us worried about their credit score:

We pull your credit and show you exactly where you stand with the mortgage versions of your scores.
We tell you straight up which programs you qualify for today.
If you're close to a threshold, we identify the quickest path to get there.
If you need more time, we create a roadmap and stay in touch.

We're not going to waste your time or ours. If you're ready to buy, great. If you need 3 months of credit repair, we'll tell you that. Either way, you'll know exactly where you stand.

Take the First Step

Wondering where your credit actually falls? Don't guess. Let's find out.

Take our quick qualifier quiz to see what DPA programs might work for your situation. It takes a couple minutes and gives you a real starting point.

Or just call us directly. We're happy to pull your credit and give you an honest assessment.

Tanner Cook - 469-405-2690 - NMLS #2090424
Zac Cook - 469-405-2690 - NMLS #2111496

No pressure. No judgment. Just straight talk about where you are and how to get where you want to be.

Tanner Cook is a licensed mortgage loan originator (NMLS #2090424) with Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855). This content is for informational purposes only and does not constitute financial advice. Loan approval is subject to credit and property qualification. Equal Housing Lender.