Buying a new construction home in Texas can come with real help from the builder right now, from price cuts to closing cost credits. The incentive is only one part of the decision, though. Before you sign, compare the full written mortgage offer, review the builder’s contract, plan your own inspections, coordinate the build and closing dates, and budget for property taxes on the finished home. This guide walks through each step in plain English.
TL;DR
- Builders are discounting: in October, 43% of builders cut prices and 65% used sales incentives, according to the National Association of Home Builders.
- Judge an incentive by the full written offer, not the headline credit. Compare Loan Estimates for the same loan.
- You can shop for your mortgage. If a builder refers you to an affiliated company, federal rules generally call for a written disclosure that says you are not required to use it.
- Texas new home contracts let you hire your own TREC-licensed inspector. New does not mean defect-free.
- Put the completion date, rate-lock expiration and closing date on one calendar, and file for your homestead exemption after you move in.
Why builder incentives are in the news
On October 19, 2026, the National Association of Home Builders (NAHB) reported that builder confidence fell three points to 29 in October, the lowest reading since June 2012. The same survey found that 43% of builders cut prices in October, the highest share of the 2020 to 2026 period, and the average price cut held at 6% for the seventh month in a row. Sixty-five percent of builders used sales incentives, the 19th straight month that at least 60% did. The three-month average for the South, which includes Texas, slipped one point to 30.
New homes are a big part of the Texas market. The Dallas Express reported on October 20 that newly built homes made up 31% of Dallas-Fort Worth-Arlington listings from January through June 2026, citing a Realtor.com analysis. It also cited the MetroTex Association of Realtors’ October 16 update: North Texas single-family sales in September were 7% lower than a year earlier, with 4.3 months of inventory.
Not every builder or homesite has the same room to negotiate, but it is a good time to ask what is offered on the specific home you want and what strings come with it.
How builder incentives work on a new construction home in Texas
Builder incentives come in a few common forms:
- A lower sales price on a specific home or plan.
- A credit toward closing costs, much like a seller credit on a resale home.
- Design-center allowances or upgrades.
- Help paying for a temporary or permanent rate buydown.
Temporary vs. permanent buydowns
A temporary buydown uses money set aside up front to reduce your rate for an initial period, after which your payment rises to the amount based on the rate in your note. For conventional loans sold to Fannie Mae, its Selling Guide says you must be qualified at the note rate, not the bought-down rate. Plan your budget around the full payment, not the starting one.
A permanent buydown usually means paying discount points. The Consumer Financial Protection Bureau (CFPB) explains that points let you trade higher upfront costs for a lower interest rate. When a builder pays for points, ask how much of the incentive that uses up compared with other ways to spend it.
Compare the whole offer, not the biggest number
The CFPB suggests comparing Loan Estimates for the same loan amount and loan type. Look at the rate, the monthly payment, the upfront loan costs in Section D, any credits in Section J, and your cash to close. A practical side-by-side:
- The builder’s package with its affiliated or preferred mortgage company. List every credit, condition, and deadline.
- The same home financed elsewhere. Ask which parts of the incentive stay.
- A price cut vs. a credit. A lower price lowers your loan amount; a credit lowers what you bring to closing. Each loan program limits how much a builder or seller can contribute; for conventional loans, see Fannie Mae’s interested party contribution rules.
Get the incentive, any provider requirement, and the deadline in writing. Our guide to closing costs in Texas explains what they include and how to lower them.
The builder’s mortgage company and your right to shop
Many builders own or partner with a mortgage company and a title company. Under the federal Real Estate Settlement Procedures Act and its Regulation X affiliated business rule, when someone refers you to a settlement provider they are affiliated with, they generally must give you a written Affiliated Business Arrangement Disclosure. It describes the relationship and the estimated charges, and it states that you are not required to use the listed provider.
Builders may offer packages and discounts. Regulation X says a package or discount is not a “required use” only if it is optional, is a true discount below prices otherwise generally available, and is not made up elsewhere in the transaction. That’s why comparing written Loan Estimates matters.
As a mortgage broker, The Texas Mortgage Pros can show you options from the wholesale mortgage companies we work with so you can compare them with the builder’s. Sometimes the builder’s package is the right fit; the point is to decide based on the numbers. Questions to ask:
- Which parts of the incentive require your affiliated mortgage or title company?
- Where is the incentive written into my contract or an addendum?
- How long is the rate lock, and who pays if construction runs late?
Texas new home contracts: what to read before you sign
The Texas Real Estate Commission (TREC) publishes two new home contracts: the New Home Contract (Incomplete Construction), TREC No. 23-20, and the New Home Contract (Completed Construction), TREC No. 24-20. Both versions took effect July 1, 2026. TREC says real estate license holders must use its forms, but a builder selling its own homes may use its own contract, so read whatever you sign, including every addendum.
Key points in the TREC new home forms:
- Inspections. You may have the home inspected by inspectors you select who are licensed by TREC or otherwise permitted by law.
- Termination option. Both forms include an option fee paragraph. A negotiated option period gives you an unrestricted right to end the contract within that time.
- Change orders (incomplete construction). The builder must follow the signed plans and selections. Change orders must be in writing, and the contract says how you pay for changes or selections above the allowances.
- Completion date (incomplete construction). The contract sets a start deadline and a substantial completion date, meaning final approval by local authorities and any mortgage company financing the home. Delays from acts of God, strikes, or unavailable materials add time, but never past the closing date.
- District notices and prorations. The forms cover required notices, such as for a public improvement district (PID) or a water district (e.g., a MUD), and prorate current-year taxes through closing.
If a clause is unclear, ask your real estate agent and a real estate attorney before you sign. Do not let an incentive deadline rush you.
Inspections on a new build
City inspections and the builder’s own checks are not an inspection done for you. Because both TREC new home forms let you choose your own licensed inspector, many buyers plan more than one visit, such as before drywall goes up and again before closing. Ask the builder in writing how your inspector can access the site.
TREC’s guide to what consumers should know about Texas property inspections explains what a licensed inspection covers and how to check an inspector’s license. Share reports with the builder promptly and keep copies of every response and repair.
With an FHA loan, HUD’s Single Family Housing Policy Handbook 4000.1 treats homes that are proposed, under construction, or completed less than one year ago and never occupied as new construction, and the appraiser reports deficiencies against HUD’s property standards. An appraisal is still not a home inspection.
Warranties and the Chapter 27 notice
Ask for every warranty document before closing. Both TREC new home forms say that, except as stated in the contract, in a separate writing, or as provided by law, the seller makes no other express warranties, and that the seller assigns any assignable manufacturer warranties to you at closing. So read what the written builder warranty covers and for how long.
Both forms also include a notice about Chapter 27 of the Texas Property Code. If your construction defect hasn’t been corrected, you must send the contractor written notice by certified mail, return receipt requested, at least 60 days before you file a lawsuit or start arbitration, and give the contractor a chance to inspect and fix the defect if it asks. Keep your records organized, and talk with a real estate attorney if a dispute comes up.
Appraisal, completion and rate-lock timing
With a to-be-built home, your financing timeline depends on construction, so a job-site delay can move your closing. Put selection deadlines, inspections, projected completion, the appraisal, the rate-lock expiration, and closing on one calendar.
The CFPB’s rate lock explainer says a lock holds your rate only if you close within the lock period and nothing in your application changes, and that a lock can be expensive to extend. Ask what lock periods cost and what happens if the schedule slips. The CFPB notes that changes to your credit, income, or the appraised value can change a locked rate, so avoid new debt before closing. Our guide to how much house you can afford in Texas can help you set a budget with some cushion for delays.
Building on your own lot instead? Financing works differently; see our page on construction loans.
Property taxes and the homestead exemption on a new home
The Texas Comptroller explains that appraisal districts value property as of January 1 each year. If your home was only partly built on January 1, the first tax bill may reflect that, and the next year’s value can reflect the finished home. Budget for taxes on the completed house and ask about any MUD or PID assessment. Our guide to Texas property taxes and your monthly mortgage payment explains how these affect escrow.
To qualify for the general residence homestead exemption, the Comptroller says you must own the home and use it as your principal residence. If you buy after January 1, you may receive the exemption for the rest of that tax year if the previous owner did not receive the same exemption that year. You apply with your county appraisal district using Form 50-114. Do not assume the builder or title company files it for you.
New construction do’s and don’ts
Do:
- Compare written Loan Estimates with and without the builder’s package.
- Hire your own TREC-licensed inspector, ideally for more than one visit.
- Get incentives and changes in writing.
- Line up build, lock, and closing dates.
Avoid:
- Judging an offer by the headline credit.
- Skipping inspections because the home is new.
- Relying on sales-office promises that are not in writing.
- Assuming taxes will match the brochure.
Fr,equently asked questions
Do I have to use the builder’s mortgage company to get the incentive?
It depends on the builder. Some incentives are tied to an affiliated or preferred mortgage company, and some are not. Get the conditions in writing and compare full Loan Estimates.
Should I get an inspection on a brand-new home?
Yes. TREC’s new home contracts let you choose your own licensed inspector, and it’s easier to fix issues while the builder is still on site.
What happens if construction runs late?
Check the completion and delay terms in your contract, then ask your mortgage broker how a delay affects your rate lock and any incentive deadline.
When do I file for a homestead exemption on a new home?
After you own and live in the home as your principal residence, file Form 50-114 with your county appraisal district. If you bought after January 1, you may still qualify for the rest of that year if the prior owner didn’t.
Talk with a Texas mortgage broker
A new construction home in Texas deserves more than a look at the sales-office flyer. The Texas Mortgage Pros is a mortgage broker that can help you compare the builder’s plan with other loan options and plan around the build schedule. Call (877) 280-4833 or start your application. If you are buying your first home, our guide to first-time homebuyer programs in Texas covers assistance options, and you can always contact our team with questions.
Official sources
- NAHB: Builder Sentiment Falls on Rising Rates (October 19, 2026)
- The Dallas Express: Builders Slash Home Prices As Confidence Sinks To 14-Year Low (October 20, 2026)
- TREC: Contract forms
- TREC: New Home Contract (Incomplete Construction), TREC No. 23-20
- TREC: New Home Contract (Completed Construction), TREC No. 24-20
- TREC: What Consumers Should Know About Texas Property Inspections
- CFPB: Compare and negotiate your loan offers
- CFPB: What’s a lock-in or a rate lock on a mortgage?
- CFPB: What are discount points and lender credits, and how do they work?
- CFPB: Regulation X, 12 CFR 1024.15, Affiliated business arrangements and 12 CFR 1024.2, Definitions
- Fannie Mae Selling Guide: B2-1.4-04, Temporary Interest Rate Buydowns and B3-4.1-02, Interested Party Contributions (IPCs)
- HUD: Single Family Housing Policy Handbook 4000.1
- Texas Comptroller: Property Tax System Basics and Property Tax Exemptions
This article is for general information only. It is not a commitment to lend or extend credit, and it is not legal, tax, or financial advice. All loans are subject to credit approval, underwriting, property eligibility, and program rules, and not every buyer or home will qualify for every loan or builder incentive. Builders offer incentives, not The Texas Mortgage Pros, and their terms, conditions, and deadlines vary. Contract forms, program rules, and regulations are subject to change without notice. Talk with a real estate attorney or tax professional about your own situation. Last verified October 20, 2026.
The Texas Mortgage Pros is not affiliated with or endorsed by the National Association of Home Builders, the Texas Real Estate Commission, the Consumer Financial Protection Bureau, HUD, FHA, Fannie Mae, the Texas Comptroller of Public Accounts, the MetroTex Association of Realtors, Realtor.com, The Dallas Express, or any builder, and this is not a government document.
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