For Texas buyers who aren’t FHA-ready yet
Not FHA-ready yet? Rent now, build earned equity, and keep your path to ownership open.
The Rent-to-Own Loan Program is an Earned Equity Program (EEP) for Texas homebuyers who don’t qualify for an FHA loan right now but may qualify for this program. Texas FHA Home Loans is powered by The Texas Mortgage Pros, a Texas mortgage broker.
“Rent” is our shorthand for the monthly payment you make under a Homeownership Agreement. Part of that payment is credited as earned equity.
4 quick questions. Nothing is sent from this pre-screen.
An FHA loan is the first stop for a lot of Texas buyers. Files still stall, though, usually on credit history, a short time at a job, income that’s hard to document, or a recent financial setback. If you’ve run into one of those walls, the Rent-to-Own Loan Program changes who carries the FHA financing.
Tule River, a government entity, buys the home you choose using FHA financing. You don’t take out that FHA loan yourself. Instead, you sign a separate Homeownership Agreement, move in, and make monthly payments under it, with part of each payment building earned equity toward owning the home.
This page focuses on buyers coming to us from the FHA side. For the full program description, read the rent-to-own home program page from The Texas Mortgage Pros.
Side by side
A simplified comparison to help you see where each one fits.
| Question | Standard FHA purchase | Rent-to-Own Loan Program |
|---|---|---|
| Who buys the home? | You, as the borrower on an FHA-insured mortgage | Tule River, a government entity, using FHA financing |
| What do you sign? | Your own mortgage documents | A separate Homeownership Agreement |
| What does your monthly payment do? | Pays your mortgage | Covers living in the home and builds earned equity credit |
| Do you need to meet FHA standards first? | Yes, before closing | No. Your file goes through the program’s own review, and you work toward FHA requirements over time |
| Is pre-approval final? | No | No. Your file and the home’s financing file must each be cleared |
For education only; your actual rights and costs come from the program documents. Because the purchase uses FHA financing, FHA property standards and the county’s FHA mortgage limit (HUD lookup) still apply to the home.
How it works
Here’s the order things usually happen in, written for buyers who started with an FHA application.
Tell your broker what happened. The Texas Mortgage Pros reviews your application, credit, income, assets and rental history, then gives you one list of anything still missing.
Your file goes to the program before you shop. A pre-approval comes in writing with its conditions, and it isn’t final approval.
With that written pre-approval, you pick a home and sign a purchase contract. Pre-approval before the contract is the preferred order.
The contract is assigned to Tule River, the government entity that buys the home with FHA financing. You sign a separate Homeownership Agreement for your monthly payments and earned equity.
Tule River’s financing file and your program file are reviewed separately, with items like the appraisal, title and inspections. One approval doesn’t clear the other.
Both sides close in sequence. Texas program disclosures and a waiting period apply, and your move-in date comes from the transaction’s written instructions.
We won’t quote a closing date, key date or standard timeline. Each transaction sets its own, based on the program, the home and the required disclosures and waiting periods.
Who it’s for
These are the situations we hear about most from people who weren’t approved for FHA, or who expect they won’t be.
If your scores or recent history stopped an FHA approval, you can live in the home while you keep improving your credit. A lower score may be weighed with compensating factors. See our tips for rebuilding your credit score.
Not much on your credit report? Documented payments like rent or utilities can help show your payment habits.
A newer job or business may need documented compensating factors. That’s a review item, not an automatic no.
A bankruptcy has to be discharged first. After that, the program looks at how you’ve managed money since. Compare it with the rules for FHA loans after bankruptcy.
Self-employed and commission income can be reviewed with self-employment records or bank statements. A bank statement mortgage is another option worth comparing.
The Rent-to-Own Loan Program isn’t the only alternative. Depending on your situation, a non-qualified mortgage or Texas down payment assistance programs may be a better fit, and a broker can compare them with you. First-time buyer? Start with our first-time home buyer guide.
Why buyers choose it
You move into the home you plan to own instead of renting somewhere else until your FHA file is ready.
A share of each payment is commonly treated as earned equity credit, tied to paying on time.
Program homes are usually set at an agreed price, which helps protect you from market increases during the program.
The Texas Mortgage Pros gathers documents and keeps the pre-approval, contract and closing moving.
Credit, income, assets, housing history and other requirements follow the current program version and can change.
Pre-screen
Answer one question at a time. It takes a couple of minutes, and your answers aren’t sent anywhere. At the end, you can continue to our short Texas FHA prequalification form so a broker can review your situation.
This pre-screen is for informational purposes only. It is not an application, approval, pre-approval or commitment to provide financing.
Would you rather talk it through? Call (281) 801-6965 or use the Texas FHA Home Loans contact page.
The Rent-to-Own Loan Program is a long-term commitment. Before signing your Homeownership Agreement, make sure you understand:
FAQ
Yes. The Rent-to-Own Loan Program is built for buyers who don’t qualify for FHA yet. An FHA denial doesn’t rule you out, because the program reviews your file on its own terms. If you’re not sure why your file was declined, read why FHA applications get denied.
Not for you. Tule River, the government entity that buys the home, uses the FHA financing. Your side of the deal is a separate Homeownership Agreement.
It’s shorthand for your monthly payment under the Homeownership Agreement. Part of that payment counts as earned equity credit toward owning the home.
No. A pre-approval comes with written conditions. Your file and the home’s financing file both have to be cleared before closing. The CFPB also notes that a preapproval letter isn’t a guaranteed loan offer.
Pre-approval before signing a contract is the preferred order. If you already have one, tell your broker right away so the review can be coordinated. You won’t be treated as approved until a written decision is issued.
Ask your broker before you count on it. We’ll confirm what’s allowed for your situation.
That depends on the terms of your Homeownership Agreement.
Your move-in date comes from the transaction’s written instructions. In Texas, a program disclosure describes the agency buying the home first, followed by property disclosures, a waiting period and signing the Homeownership Agreement. We don’t promise a key date in advance.
No. The pre-screen on this page isn’t an application, approval, pre-approval or commitment to provide financing, and your answers aren’t sent. If you’d like a broker to review your situation, continue to the Texas FHA prequalification form.
No. Texas FHA Home Loans isn’t a government agency and isn’t affiliated with HUD, FHA or any federal agency. It’s powered by The Texas Mortgage Pros, LLC, a licensed Texas mortgage broker.
We link to official sources where they back up what this page says:
Talk with a Texas broker about whether the Rent-to-Own Loan Program, an FHA loan later, or another option fits where you are today.
Equal Housing Opportunity.
The Texas Mortgage Pros, LLC | Company NMLS #2665861 | Gerry Nicodemus, NMLS #286371 | Equal Housing Opportunity | www.nmlsconsumeraccess.org
TexasFHA.org is not a government agency and is not affiliated with HUD, FHA or any federal agency. The site is managed by a licensed RMLO, NMLS #286371. This page is for information only and is not a commitment to extend credit. All financing is subject to review and approval, and program terms can change without notice.