Waco offers a balanced Central Texas lifestyle, featuring walkable downtown revitalization, weekend festivals along the Brazos, outdoor activities at Lake Waco and Cameron Park, and strong employment anchors near the I-35 corridor and Baylor University. For first-time home buyers, the market offers a mix of starter homes, new construction, and established neighborhoods at approachable price points. With the proper guidance, you can find an FHA home loan in Waco that matches your budget, timeline, and long-term plans.
You can use several FHA and related HUD programs to buy, build, improve, or refinance. The core options include the FHA 203(b) Purchase Loan, FHA 203(k) Renovation Loan, FHA One-Time Close Construction Loan, FHA Manufactured Home Loan (Title II), and FHA Streamline Refinance. In addition, eligible Native American borrowers may consider the HUD-184 program (administered by HUD, not FHA), and homeowners age 62+ can explore the HECM reverse mortgage.
Below, you’ll find what each product does, who it’s for, and how to qualify in clear, everyday language.
The FHA 203(b) is the standard FHA purchase mortgage that many Waco first-time buyers choose for its low down payment and flexible credit approach. You benefit from down payments starting at 3.5% with qualifying credit, competitive fixed rates, and the ability to use gift funds or down-payment assistance where available.
To qualify, you’ll occupy the home as your primary residence, meet FHA credit and debt-to-income guidelines, and complete an FHA appraisal that confirms value and property condition. You pay mortgage insurance (an upfront premium and an annual premium built into the payment), which helps FHA offer more lenient terms than many conventional options.
If you’ve found a home that needs work, such as roof repair, kitchen updates, or energy upgrades, the FHA 203(k) loan allows you to finance both the purchase and the renovation in one loan. You gain a single closing, one fixed payment, and professional oversight of the rehabilitation budget, ensuring funds are released as work is completed. Eligibility adds a few additional moving parts: you’ll work with approved contractors, submit a scope of work, and ensure that the improvements meet FHA guidelines and that the after-repair value supports the loan. For many buyers, 203(k) turns “almost right” into “just right.”
When you want to build a primary residence, the FHA One-Time Close Construction Loan program allows you to combine construction and permanent financing into a single closing. Your advantage is simplicity: you lock terms up front and avoid re-qualifying at the end of the build. Lenders will verify your income, credit, and reserves, review the builder’s credentials and plans, and require inspections during the construction process. Because construction lending carries more risk, expect tighter underwriting and a detailed budget. Still, you gain a structured path to building a new home in the Waco area without having to juggle multiple loans.
For budget-minded buyers considering factory-built housing, the FHA Title II can finance a manufactured home and land together when the home meets HUD code (built on or after June 15, 1976), is permanently affixed to an approved foundation, and is titled as real property. You get mainstream mortgage terms, lower barriers to entry, and predictable fixed payments. You’ll document income and credit as usual, provide evidence of the HUD data plate/tag, and meet appraisal standards. If the home doesn’t qualify as real property, some lenders offer chattel loans; however, the terms differ from those of FHA Title II mortgages.
If you already have an FHA mortgage, the FHA Streamline refinance can help lower your rate or payment with fewer documents and, in some cases, no appraisal. It’s designed for speed and simplicity: you must demonstrate a tangible net benefit (such as a lower monthly payment), be current on your existing FHA loan, and meet program seasoning requirements. Streamline refis are popular when market rates improve or when you want to swap an adjustable-rate loan for a fixed option with less paperwork.
The HUD-184 program is often considered in conjunction with FHA because it offers low down payments, flexible underwriting, and reduced mortgage insurance for eligible enrolled members of federally recognized tribes and certain Alaska Native Villages.
In Waco and throughout Texas, HUD-184 can be used to purchase, build, or rehabilitate a primary residence. You’ll provide documentation of tribal enrollment or eligibility, verify income and credit, and ensure the property is an acceptable primary residence. If you qualify, the HUD-184 can be a powerful alternative, offering lower upfront costs compared to many other options.
For homeowners 62 or older, a Home Equity Conversion Mortgage (HECM) lets you convert part of your home equity into cash without making monthly mortgage payments, as long as you live in the home, maintain it, and pay taxes and insurance. You can receive funds as a lump sum, line of credit, or monthly payout.
Eligibility requires counseling from a HUD-approved counselor, an FHA appraisal, and a financial assessment to confirm you can meet ongoing property obligations. For the right homeowner, HECM can supplement retirement income or create a standby line of credit for future needs.
The requirements for a Texas FHA loan program are straightforward. Across FHA programs, you’ll occupy the property as your primary residence and document stable income and employment. Many lenders require a minimum FICO score of 580 to qualify for a 3.5% down payment; scores between 500 and 579 may be possible with a 10% down payment, subject to lender overlays.
Typical debt-to-income ratios target 43% or less, though compensating factors (adequate reserves, higher credit, or larger down payment) can allow flexibility. Your loan amount must fit county loan limits, an FHA appraisal must support value and property standards, and you’ll pay upfront and annual mortgage insurance on most FHA loans. Program availability and terms can vary by lender and are subject to change over time.
Q: Are FHA loans only for first-time buyers?
A: No. FHA is popular with first-time buyers due to its low down payment requirements and flexible credit guidelines, but repeat buyers can also utilize FHA if the home will be their primary residence.
Q: Can I use gift funds or down-payment assistance with FHA in Waco?
A: Yes. FHA allows gift funds from eligible donors and can pair with down-payment or closing-cost assistance when available, subject to program rules and income limits.
Q: What’s the difference between FHA 203(b) and 203(k)?
A: The 203(b) is the standard purchase loan for move-in-ready homes. The 203(k) program adds rehabilitation funds, allowing you to buy and renovate with a single mortgage and payment.
Q: Does FHA have a construction-to-permanent option in Waco?
A: Yes. The FHA One-Time Close allows you to finance both the construction and permanent phases together. Expect additional documentation for the builder, including plans, budget, and inspection reports.
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You deserve a financing plan that fits your budget and aligns with your goals, whether you’re purchasing, renovating, building, or refinancing your property. Call us today at (877) 280-4833 and get a personalized review of your eligibility for FHA 203(b), 203(k), One-Time Close Construction, FHA Manufactured Home, FHA Streamline Refinance, HUD-184, or HECM options based on your timeline, price range, and credit profile.
