This page explains the details of new construction home financing for Austin-area buyers, including how the major loan types work, how pre-approval fits into the process, what builder incentives actually are, and what a realistic monthly payment looks like once you factor in everything beyond principal and interest.
Use the calculator below to estimate a monthly payment for a Keystone Homes new home based on sale price, down payment, interest rate, and loan term.
Estimate only. Does not include HOA dues, utilities, or maintenance. For an accurate quote, contact one of our preferred lenders: Susser Bank, Fairway Mortgage, Cardinal Financial, or Guild.
Most new construction buyers use one of five loan types. Each has its own qualification criteria, down payment requirements, and tradeoffs. Your lender will run the math to determine which product best fits your situation, but here is the short version.
Nothing on this page is a rate quote, a financial recommendation, or tax advice. For those, work with one of our preferred lenders: Susser Bank, Fairway Mortgage, Cardinal Financial, and Guild.
01
These are the most common loan types for new construction. Conventional loans are not backed by a government agency; they typically require a credit score of 620 or higher, and the standard down payment is 5 percent for primary residences, though some programs allow 3 percent for qualifying borrowers. Private mortgage insurance (PMI) is required if your down payment is under 20 percent, and the PMI drops off automatically once you reach 22 percent equity.
02
Backed by the Federal Housing Administration, these loans are designed for buyers with lower credit scores or smaller down payments. Minimum credit score is typically 580 with a 3.5 percent down payment, or 500 with a 10 percent down payment. FHA loans carry mortgage insurance premiums that run for the life of the loan in most cases, which is a long-term cost to factor in.
03
Available to eligible active-duty military, veterans, and surviving spouses, VA loans are among the most favorable loan products on the market. Zero down payment, no PMI, and competitive rates. There are funding fees that vary based on down payment and first-time use, but the total cost structure is typically better than conventional for qualifying buyers. If you are VA-eligible, this should be your first conversation with a lender.
04
USDA loans are backed by the United States Department of Agriculture and are available for homes in designated rural areas. Not every Austin-area community qualifies, but some outlying areas do, and the program offers zero down payment with competitive rates. Your lender can confirm whether a specific homesite is USDA-eligible.
05
Jumbo loans apply when the loan amount exceeds the conforming loan limit set by the Federal Housing Finance Agency. For 2025, the conforming limit in most Texas counties is $806,500. Loans above that threshold typically require higher credit scores (often 700+), larger down payments (often 10 to 20 percent), and more extensive income documentation. For higher-priced homes at Brahmans Draw, jumbo financing is often the right product.
How It Works at Keystone
A standard mortgage is what most buyers use, because Keystone Homes is the owner and builder of the home during construction. You sign a Sales Agreement to buy a finished home or a to-be-built home, Keystone Homes finances the construction itself, and your mortgage funds at closing once the home is complete.
Down payment requirements vary by loan product, and the number most buyers quote from memory is often outdated or specific to a single product. Here is a realistic picture of what down payments look like today.
What typically does not count: unsecured personal loans or newly opened credit lines.
Programs are available for qualifying Texas buyers through the Texas Department of Housing and Community Affairs (TDHCA) and several municipal and county programs in the Austin metro. These programs typically offer either grants or deferred second liens that help cover down payment and closing costs. Eligibility is based on income limits, first-time buyer status, and the specific program, and not every program works with every lender. Ask your lender whether you qualify for any current assistance programs.
| Loan Type | Down Payment | Note |
|---|---|---|
| Conventional | 3 – 20% | PMI required under 20% |
| FHA | 3.5% / 10% | Score 580+ / 500–579 |
| VA | 0% | Eligible borrowers |
| USDA | 0% | Eligible locations only |
| Jumbo | 10 – 20%+ | Often higher |
Your credit score is one of the most important inputs in your mortgage approval and the rate you are offered. Here is how the ranges typically break out for new construction financing.
Pre-approval is a written commitment from a lender indicating how much they are willing to lend you based on a full review of your credit, income, assets, and debts. It is different from pre-qualification, which is an informal estimate based on unverified information you self-report.
Our four preferred lenders (Susser Bank, Fairway Mortgage, Cardinal Financial, and Guild) are ready to get you pre-approved. Please choose one or two to give you quotes.
Two reasons. First, you should know your real budget before you fall in love with a specific floor plan or homesite. Pre-approval tells you exactly what price range you qualify for based on current rates and your specific financial picture. Second, signing a contract for a new home typically requires a pre-approval letter within 5 days of executing the Sales Agreement.
Contact one of our four preapproved mortgage lenders (Susser Bank, Fairway Mortgage, Cardinal Financial, and Guild), complete a loan application, and provide documentation of your income, assets, employment, and debts. Most lenders can issue a pre-approval letter within 48 to 72 hours of receiving a complete application.
Your credit is pulled during this process, which is a hard inquiry, but multiple mortgage inquiries within a 45-day window are typically treated as a single inquiry by the major credit bureaus.
Ask your sales agent for contact information for our preferred lenders.
We offer financial incentives to buyers who finance through a preferred lender or who purchase during specific promotional periods. These incentives are real value, not marketing fluff. Types change from time to time, so be sure to stay updated on our website or speak with your Sales Agent to discover the latest financial incentives and rate buydowns.
Your monthly mortgage payment is typically more than just principal and interest. Understanding the full picture is important because the difference between "principal and interest only" and "total monthly payment" is often several hundred dollars.
The core mortgage payment, calculated from your loan amount, interest rate, and loan term (typically 30 years).
Texas has no state income tax, but property taxes run higher than the national average. Rates typically run 1.52% at Brahmans Draw and 2.01% at Cielo, including school district, county, city, and/or ESD.
Required by your lender, priced based on home value, location, and coverage level. Typical Austin-area annual premiums range from $1,500 to $3,000 for standard coverage.
Both Cielo and Brahmans Draw are HOA communities. Ask your Sales Agent for details.
Required on conventional loans with less than 20 percent down, typically 0.3 to 1.5 percent of the loan amount annually, added to the monthly payment.
Closing costs are the fees associated with finalizing your mortgage and transferring the title to the home. They are paid at closing, separate from your down payment, and typically run 2 to 5 percent of the purchase price for a new-construction home.
Some closing costs are negotiable; others are not. Lender fees can sometimes be negotiated or shopped between lenders. Third-party fees and government fees are typically fixed. Your lender provides a loan estimate within three business days of application that itemizes all expected closing costs in standardized categories required by federal law.
On a $450,000 Home
Closing costs of 2–5% = $9,000 – $22,500
The Texas Department of Housing and Community Affairs (TDHCA) offers down payment assistance, first-time buyer mortgage programs, and mortgage credit certificates. The TDHCA homeownership programs site has current program details and eligibility requirements.
Visit TDHCA.texas.govThe Consumer Financial Protection Bureau (CFPB) publishes neutral, educational guides on every stage of the mortgage process. The CFPB homebuying guide is one of the most useful free resources available for first-time buyers.
Visit ConsumerFinance.govA low-down-payment conventional loan product (3 percent down) designed for low- and moderate-income buyers. Income limits apply based on location.
A similar 3 percent down conventional loan product with eligibility criteria that are different but comparable.
The City of Austin, Travis County, and Williamson County periodically offer first-time buyer programs with varying terms. Your lender is the best source for current local program availability.
Keystone Homes works with a select group of preferred lenders with deep experience in new construction financing in the Austin area and familiarity with our construction timelines, closing processes, and documentation requirements. Working with a preferred lender can streamline the transaction and, in some cases, unlock builder incentives that are not available with non-preferred lenders.
Deep Texas roots with hands-on experience in new construction financing and Austin-area market dynamics.
National lender with a strong local Austin presence and a wide range of purchase loan products.
Technology-forward lender with competitive products across conventional, FHA, VA, and jumbo.
Full-service mortgage company with strong first-time buyer programs and reliable closing timelines.
Contact a Sales Agent to receive preferred lender information.
You are not required to use a preferred lender. Keystone Homes buyers are welcome to finance through any qualified lender of their choice. The preferred lender list is a starting point, not a requirement. However, our builder incentives are offered only if you use one of our preferred lenders. Preferred lenders offer a smooth, efficient loan process and a timely closing with confidence.
New construction home financing, explained. Call (512) 236-5380 for anything not covered here.
The money you need upfront falls into two categories: $10,000 earnest money, down payment and closing costs. Down payment ranges from 0 percent (VA, USDA) to 20 percent or more, depending on loan type and credit profile. Closing costs typically run 2 to 5 percent of the purchase price. On a $450,000 home, a buyer using a 5 percent down conventional loan would need approximately $22,500 for down payment plus $9,000 to $22,500 for closing costs, for a total of $31,500 to $45,000. Your lender provides a Loan Estimate that itemizes your specific numbers within three days of application.
The minimum credit score depends on the loan type. For conventional loans, 620 is the typical minimum, though better rates start at 680 and strong rates start at 740. FHA loans accept scores as low as 580 with a 3.5 percent down payment, or 500 with a 10 percent down payment. VA and USDA loans have flexible credit requirements for qualifying borrowers. A credit score is only one factor. Debt-to-income ratio, employment history, and reserves also matter. Your lender evaluates the complete financial picture, not just the score.
A 2-1 buydown is a temporary rate reduction on a mortgage, typically paid for by the builder as an incentive. In year one of the loan, the buyer pays a rate 2 percentage points below the permanent rate. In year two, the rate is 1 percentage point below the permanent rate. In year three and beyond, the rate is the full permanent rate. The builder funds this upfront at closing by depositing the cost of the reduced payments into a buydown account. The loan itself is a standard 30-year mortgage, just with reduced payments in the first two years. We also offer an incentive to do a permanent buydown throughout the life of the loan.
No. Keystone Homes does not offer financing directly. Our buyers finance through their choice of licensed mortgage lender. Keystone Homes is the builder, not the mortgage originator, and keeping the construction business and the financing relationship separate is standard practice in the production and semi-custom builder segments.
Keystone Homes prefers that buyers use one of our preferred lenders, as all our incentives are tied to using one of our four preferred lenders.
Closing costs in Texas typically run 2 to 5 percent of the purchase price on a new construction home. On a $450,000 home, that is $9,000 to $22,500. The range varies based on loan type, lender fees, title insurance costs, and prepaid items such as property tax escrow and homeowners' insurance. Some closing costs are negotiable (lender fees), and some are not (government recording fees, third-party appraisal and title fees). Your lender provides a Loan Estimate within 3 business days of your application that itemizes all expected costs in categories required by federal law.
Private mortgage insurance (PMI) is a monthly insurance premium required on conventional loans when the down payment is less than 20 percent of the home's value. It protects the lender, not the buyer, against default. PMI is typically 0.3 to 1.5 percent of the loan amount annually, added to the monthly payment. Once the loan balance reaches 78 to 80 percent of the home's original value (depending on the loan terms), PMI automatically drops off. On FHA loans, the mortgage insurance premium structure differs and often lasts the full loan term.
Yes. The Texas Department of Housing and Community Affairs (TDHCA) offers down payment assistance and first-time buyer mortgage programs with income limits and eligibility criteria. Fannie Mae's HomeReady and Freddie Mac's Home Possible programs offer 3 percent down conventional loans for qualifying low and moderate-income buyers. The City of Austin and several programs in Travis and Williamson counties offer periodic assistance. Your lender is the best source for current program availability and eligibility for your specific situation. Program terms, funding, and eligibility change regularly, so always confirm current details before making decisions.
Apply your Design Center credit toward premium finishes, upgrades, and personalization. Combine with Flex Cash toward rate buydowns or closing costs. Incentives move with inventory, current homes only.