2025 FHA New Construction Loan Requirements: Explained

Thinking about building your dream home from the ground up?

An FHA new construction loan could help you pull it off if your credit score isn’t perfect or you don’t have a huge pile of cash for a down payment.

FHA new construction loans come with their own set of rules, qualifications, and moving parts that you need to get familiar with before you start sketching floor plans.

This guide breaks down FHA new construction loans, how they work, and the requirements to qualify in 2025.

What Is An FHA New Construction Loan?

At a high level, an FHA construction loan (sometimes called a Construction-to-Permanent Loan) is a type of mortgage loan that lets you finance the construction costs of a new construction home, then automatically convert that into a permanent mortgage when the home is complete.

Instead of taking out two separate loans (one to build, and another to buy), you get one mortgage with one closing, which can save you thousands in closing costs.

What Is The Difference Between FHA New Construction Loans And Traditional FHA Mortgages?

A traditional FHA mortgage is designed to help you buy an existing home—something already built, inspected, and move-in ready.

An FHA new construction loan, on the other hand, is used to finance the building of a brand-new home from the ground up. It rolls your construction costs and permanent mortgage into a single loan, so you only go through one closing.

That makes it especially appealing to first-time borrowers with lower credit scores or limited savings who still want to build a home instead of buying a resale.

A couple looking at blueprints in their living room

How Do FHA New Construction Loans Work?

These loans are backed by the Federal Housing Administration, which gives mortgage lenders a little more confidence when lending to people who might not qualify for conventional construction loans.

When you apply, you’re approved for a short-term construction loan and a permanent loan all at once.

Once your home is finished and passes inspection, the loan converts into a typical FHA mortgage with regular monthly payments.

That’s why you’ll often hear this loan referred to as an FHA construction-to-permanent loan.

FHA New Construction Loan Requirements (2025)

These are the FHA loan requirements specific to new construction loans as of 2025.

Minimum Credit Score Requirements

For most borrowers, the standard FHA rule applies: a 580 score qualifies you for just 3.5% down.

If your score falls between 500 and 579, you may still qualify, but you'll need to put down at least 10%, and many lenders won’t accept applications in that range.

That said, some lenders set higher minimums specifically for construction-to-permanent loans.

In those cases, a 640 score may be required instead of 580 to account for the added risk of financing a full build.

In a nutshell:

  • 580+ → Minimum 3.5% down
  • 500–579 → May qualify with 10% down (fewer lenders available)
  • 640+ → Often required by lenders for construction-to-permanent loans

Down Payment Requirements

If your credit score is 580 or higher, the minimum down payment for an FHA construction loan is just 3.5% of the loan amount. That's one of the big reasons these loans appeal to first-time buyers and borrowers with limited savings.

You don’t have to come up with that money entirely on your own, either.

Funds can come from your own savings, a gift from a family member, or an approved down payment assistance program.

Compared to conventional construction loans, which typically require a large down payment of 20% or more, FHA construction loans offer a much lower barrier to entry.

Builder Qualification Requirements

For FHA new construction loans, your builder matters just as much as your lender.

You can’t hire just anyone with a toolbox.

The builder must be licensed, insured, and able to meet FHA approval standards, which means submitting paperwork to your lender before construction begins.

Most lenders will also look for at least two years of verifiable experience to ensure the builder knows how to manage a full-scale construction project.

On top of that, the builder is required to provide a new construction warranty, which helps protect you from defects or structural issues after move-in.

Property Eligibility and Inspection Requirements

FHA construction loans are only available for homes you plan to live in full time. They must be your primary residence, not a vacation home or investment property.

Eligible property types include single-family homes, FHA-approved condominiums, and certain manufactured homes, as long as they meet the FHA’s structural and safety standards.

Throughout the build, the home will undergo multiple inspections at key stages of construction.

These are required to make sure your builder is following approved plans and that the home meets all federal safety guidelines.

Qualified professionals, such as ICC-certified inspectors, licensed architects, or structural engineers with experience in residential construction, must carry out the inspections.

Appraisal Requirements

An appraisal is an independent assessment of what your future home will be worth once it’s built.

Before you’re approved, an FHA-approved appraiser must review:

  • The lot and construction plans
  • The home's purchase price (projected)
  • Overall safety, durability, and market value

The appraiser makes sure that the loan amount is in line with the future mortgage value of the completed home.

Debt-to-Income Ratio (DTI) Requirements

Your debt-to-income ratio (DTI) is one of the key factors lenders use to evaluate whether you can realistically afford your loan.

It compares your total monthly debt payments to your gross monthly income, and it helps lenders assess the risk that buyers won’t be able to make their future mortgage payments.

For FHA construction loans, the standard DTI cap is about 43%

Some mortgage lenders may allow a higher ratio if you have strong credit, significant savings, or other compensating factors. 

In general, the lower your DTI, the better your chances of getting approved (and the better your shot at a competitive interest rate).

Title and Closing Requirements

With an FHA construction-to-permanent loan, everything happens in one closing, before the build begins. 

That single closing covers the land purchase, the construction budget, and your future mortgage. 

It’s simpler than juggling multiple loans and can save you a significant amount in fees.

To move forward, you’ll need to provide:

  • A signed construction contract with a fixed-cost breakdown
  • Approved building plans
  • Proof of required permits (like septic or zoning approval)
  • Your down payment and closing costs at signing

And like all FHA loans, you’ll be responsible for mortgage insurance premiums (MIP), which protect the lender in case of default:

  • 1.75% upfront MIP, which can be rolled into the loan
  • Annual MIP, typically 0.55%, is added to your monthly payments
A man checks off the boxes on an FHA construction loan requirement checklist.

FHA Loan Limits As Of 2025

There’s a cap on how much you can borrow with an FHA construction loan, and it’s based on where you’re building.

For 2025, FHA loan limits for a single-family home range from $524,225 in lower-cost areas up to $1,209,750 in high-cost markets.

If you're building a multi-unit property, the limits are higher.

Since these numbers vary by county, the easiest way to find your maximum loan amount is to use the HUD loan limit search tool and check your location.

Types of FHA Construction Loans

There are two main loan types for people building or renovating with FHA support.

FHA One-Time Close Construction Loan

This is the standard FHA construction-to-permanent loan. 

It covers the full process—from buying the land to building the home to converting into a permanent mortgage once construction is complete. 

There’s just one closing, which means fewer fees, fewer surprises, and a more straightforward experience.

FHA 203(k) Rehab Loan (for Renovations Only)

If you're buying a home that needs repairs—not building new—the FHA 203(k) loan lets you finance both the purchase and renovation under one mortgage. 

It’s available in two forms (Standard and Limited), depending on the size of the project. 

But it’s not intended for new builds. 

If you’re starting from scratch, you’ll want to stick with the One-Time Close option.

FHA Construction Loans: Pros And Cons

Let’s talk trade-offs. These loans aren’t perfect for everyone. But for the right borrower, they can be a great fit.

FHA Construction Loan Pros

  • Lower credit score requirement (580+).
  • Smaller down payment than conventional construction loans.
  • One-time close reduces closing costs and paperwork.
  • Government backing for lenders allows flexible qualification standards.
  • Access to a primary residence that’s fully custom-built.

FHA Construction Loan Cons

  • Fewer mortgage lenders offer these loans, and they can be hard to find.
  • Strict builder and property requirements limit flexibility.
  • Slower approval process due to inspections and extra documents.
  • Mortgage insurance premiums last the life of loans with less than 10% down.
  • Can’t be used for vacation homes or investment properties.

When Should You Choose An FHA Construction Loan?

An FHA construction loan is especially helpful for buyers who are focused on building a primary residence and want the extra protection that comes with a federally backed loan.

You might want to choose an FHA construction loan if:

  • You’re building a primary residence (not an investment or second home).
  • You need a lower down payment and can’t meet the 20% typically required for conventional loans.
  • Your credit score falls below the threshold for conventional construction financing.
  • You value the safety net that comes with Federal Housing Administration (FHA) backing.
A builder and client review construction plans on a home site.

How To Qualify and Apply

Getting approved for an FHA construction loan takes more paperwork than a traditional mortgage, but the process is straightforward if you know what to expect.

Step 1: Search FHA-Approved Lenders

Not all lenders offer FHA construction loans, so start by using the HUD Lender List and filtering for providers in your area that handle construction-to-permanent financing.

Step 2: Verify Builder Eligibility

Your builder must meet FHA guidelines. Make sure they’re licensed, insured, and have a track record of successful builds that meet FHA loan requirements.

Step 3: Gather Documentation

You'll need to provide standard financial documents like W-2s, pay stubs, and bank statements, along with project-specific items like a construction contract, permits, and detailed building plans.

Step 4: Get Preapproved

This confirms your maximum loan amount, helps lock in an interest rate, and gives you time to review homeowners insurance options before closing.

FHA New Construction Loan Alternatives

If an FHA loan doesn’t fit your needs, you may want to consider one of these options instead:

VA Construction Loan

Backed by the Department of Veterans Affairs, this loan is available to eligible service members and veterans. 

It offers 0% down and no private mortgage insurance, but requires a VA-approved builder and proof of eligibility.

USDA Construction Loan

Designed for homes in rural areas, USDA loans offer no down payment and flexible terms. 

However, they come with income and location restrictions set by the Department of Agriculture.

Conventional Construction Loans

These loans typically require a higher credit score and larger down payment, but they offer more flexibility with builders and property types. 

Unlike most FHA loans, mortgage insurance can often be removed once enough equity is built.

Building Your Dream Home Starts With the Right Loan And Builder

An FHA new construction loan gives you a way to build the home you want, even if you don’t have perfect credit or a massive down payment.

Compared to conventional financing, it offers lower entry barriers, a one-time closing, and more flexibility for first-time buyers or anyone building on a budget.

But while the financing matters, the builder you choose is just as important.

A reliable, experienced builder who knows how to work within FHA loan requirements can make the difference between a smooth construction process and a stressful one.

If you’re ready to take the next step, Dunn & Stone Builders can help.

We’ve worked with FHA-approved lenders and homebuyers across Texas to build beautiful, long-lasting homes while making the process straightforward and transparent.

Let’s talk about what it takes to build your dream home.

Frequently Asked Questions

Can you be your own contractor with an FHA construction loan?

No, you can’t act as your own contractor. The FHA requires that you hire a licensed, independent builder who meets their eligibility criteria. DIY projects or using friends and family don’t qualify.

Can you use an FHA construction loan for a manufactured home?

Yes, but the manufactured home must meet HUD standards and be permanently installed on a fixed foundation. It also has to serve as your primary residence.

What are the FHA loan limits for 2025?

For 2025, FHA loan limits for single-family homes range from $524,225 to $1,209,750, depending on the county and local housing costs. Limits are higher for multi-unit properties.

Do FHA construction loans require mortgage insurance?

Yes. FHA construction loans require both upfront and annual mortgage insurance premiums (MIP). These premiums protect the lender and are required for the life of the loan in most cases.

Can you use an FHA construction loan for an investment property or second home?

No. FHA construction loans are only available for properties you intend to use as your primary residence. They cannot be used for vacation homes or rentals.

Company
Liberty Home Guard
American Home Shield
First American Home Warranty
Cinch Home Services
Old Republic Home Protection
HomeServe
Choice Home Warranty
Home Warranty Of America
Texas Coverage?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
Covers Major Home Systems & Appliances?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes (via separate plans)
✅ Yes
✅ Yes
Monthly Premium
Starts at $49
Starts at $39
Starts at $42
Starts at $35
Starts at $45
Starts at $7
Starts at $35
Start at $46
Service Fee
Typically $75–$125
$100–$125 (customer selects at sign-up)
$75–$125
$100–$150 (customer selects at sign-up)
Typically $100
$0–$100 depending on plan
$85 (fixed)
$50-$100
Typical Response Time
24–48 hours
Varies (reports range from 24 hours to multiple weeks)
Often within 24 hours
Often within 24 hours
Varies by region
Varies by location
Varies by region
48 hours
Average Rating
4.6/5.0 on Trustpilot (5,000+ reviews)
4.2/5.0 on Trustpilot (12,000+ reviews)
4.0/5.0 on Trustpilot (16,000+ reviews)
4.1/5.0 on Trustpilot (4,000+ reviews)
4.1/5.0 on Trustpilot (13,000+ reviews)
4.4/5.0 on Trustpilot (1,000+ reviews)
4.0/5.0 on Trustpilot (49,000+ reviews)
3.9/5.0 on Trustpilot (2,000+ reviews)
Pros
  • Dual AC coverage in the base plan, ideal for Texas heat
  • High customer satisfaction
  • Over 30 add-ons for extra coverage
  • Mobile app and live chat support
  • No maintenance history required for claims
  • Covers appliances and systems of any age
  • Offers coverage for preexisting conditions
  • Mobile app allows you to request service anytime, anywhere
  • High coverage limits ($7,000 for appliances, unlimited for systems)
  • Claims often resolved within 24 hours
  • Optional upgrade covers issues related to poor installation
  • Budget-friendly plans start at $35/month
  • $500 homeowners insurance deductible reimbursement
  • 180-day workmanship guarantee, longest on this list
  • Covers rust, corrosion, and unknown pre-existing conditions
  • Great for normal wear and tear on HVAC, electrical, and plumbing
  • Straightforward plans
  • Lower-than-average service request fees
  • Several plans come with no service fees
  • Highly flexible, system-specific plans tailored to your needs
  • Affordable entry pricing starts at $7/month for individual plans
  • Fixed $85 service fee helps homeowners budget confidently
  • Broad home warranty cover for HVAC, appliances, and more
  • Includes optional coverage for issues like roof leaks
  • Generous HVAC coverage, ideal for Texas heat
  • Transparent pricing, rare in the industry
  • Wide range of add-on options for upscale homes
Cons
  • Lower coverage limits on some repairs raise out-of-pocket repair costs
  • Some service fee options are unclear until you begin the sign-up process
  • Occasional complaints about delays in technician assignment
  • Higher premiums compared to more affordable plans
  • Few add-on coverage options
  • Some complaints of poor customer service and long claim resolution times
  • Less budget-friendly for cost-conscious homeowners
  • Limited add-on coverage selection
  • Does not cover pre-existing conditions, limiting protection for older homes
  • HVAC coverage not included in the “Repair Only” plan
  • No roof leak coverage
  • Higher service request fees than competitors
  • Limited add-on options
  • Comprehensive coverage requires stacking plans
  • Bundled options are confusing, not necessarily comprehensive
  • Frequent reports of claim denials
  • Mixed customer service reviews
  • Fewer added perks than competitors
  • Some customers report slow claim processing
  • Add-ons can raise the overall cost quickly if you're not careful

Our Top Pick: Liberty Home Guard

If you're looking for the best home warranty company in Texas, Liberty Home Guard stands out as the top choice in 2025. 

It’s not the cheapest option on the list, but it consistently ranks as one of the top home warranty providers thanks to its strong home warranty coverage, fast service, and unmatched flexibility.

Liberty’s plans are designed for real life in Texas, where dual air conditioning systems, major home systems, and high summer temps are the norm. 

It’s one of the few home warranty companies that includes coverage for two electric AC units in its standard plan.

What also sets Liberty apart is its level of customization. 

With over 30 add-on coverage options, homeowners can build a plan that fits their property perfectly, whether they need coverage for a septic system, a swimming pool, or extra laundry appliances. 

This kind of flexibility is rare among other home warranty companies.

It’s not just the coverage options that impress, though. 

Liberty earns high marks from home warranty customers for its responsiveness and customer service. 

You can manage your home warranty contract through their mobile app, which many Texas homeowners love for the convenience when filing a claim or tracking repairs.

Visit Liberty Home Guard's website to view plan details or explore Liberty Home Guard’s plans directly.

Quick Facts: Liberty Home Guard

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $49
Service Fee
Typically $75–$125
Typical Response Time
24–48 hours
Average Rating
4.6/5.0 on Trustpilot (5,000+ reviews)
Pros
  • Dual AC coverage in the base plan, ideal for Texas heat
  • High customer satisfaction
  • Over 30 add-ons for extra coverage
  • Mobile app and live chat support
Cons
  • Lower coverage limits on some repairs raise out-of-pocket repair costs
  • Some service fee options are unclear until you begin the sign-up process
  • Occasional complaints about delays in technician assignment

Runner Up: American Home Shield

Coming in close behind Liberty, American Home Shield ranks as one of the best home warranty providers in Texas for 2025. 

With over 50 years of experience and broad home warranty coverage that includes preexisting conditions, this provider has built a strong reputation among homeowners with older homes, aging heating systems, and major appliances.

In a 2025 This Old House survey, 44% of Texas homeowners selected American Home Shield as their current provider, making it one of the most widely used Texas home warranty companies.

Our favorite features is the $5,000 HVAC coverage cap per system, which is ideal for the Texas climate. The reason we love it is because A/C repairs are some of the most common (and expensive) home service calls made in the Houston area.

Quick Facts: American Home Shield

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $39
Service Fee
$100–$125 (customer selects at sign-up)
Typical Response Time
Varies (reports range from 24 hours to multiple weeks)
Average Rating
4.2/5.0 on Trustpilot (12,000+ reviews)
Pros
  • No maintenance history required for claims
  • Covers appliances and systems of any age
  • Offers coverage for preexisting conditions
  • Mobile app allows you to request service anytime, anywhere
Cons
  • Higher premiums compared to more affordable plans
  • Few add-on coverage options
  • Some complaints of poor customer service and long claim resolution times

Other Great Home Warranty Companies In Texas

While Liberty Home Guard and American Home Shield earned our top spots, they’re not the only Texas home warranty companies worth your attention. 

Several other home warranty providers offer solid coverage, competitive pricing, and reliable service. 

If you're looking for alternatives that still deliver great value and protection for your covered home systems, the options below are absolutely still worth considering.

First American Home Warranty

While it’s a bit pricier than some affordable plans (with monthly premiums starting at $42), First American Home Warranty makes up for it with higher coverage limits and solid protection for both major appliances and covered systems. 

This is especially appealing to owners of high-end homes in Houston.

Some plans offer up to $7,000 in appliance coverage and unlimited HVAC system coverage, which is what makes this company a strong contender for anyone who wants broad, comprehensive coverage (as long as you’re willing to pay a little more for it).

One standout feature is the First American Advantage upgrade, which adds protection for poor installation issues not always covered under standard home warranty plans.

Quick Facts: First American Home Warranty

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $42
Service Fee
$75–$125
Typical Response Time
Often within 24 hours
Average Rating
4.0/5.0 on Trustpilot (16,000+ reviews)
Pros
  • High coverage limits ($7,000 for appliances, unlimited for systems)
  • Claims often resolved within 24 hours
  • Optional upgrade covers issues related to poor installation
Cons
  • Less budget-friendly for cost-conscious homeowners
  • Limited add-on coverage selection
  • Does not cover pre-existing conditions, limiting protection for older homes

Cinch Home Services

Cinch Home Services is a strong option for Texas homeowners looking for affordable plans with practical extras. 

With monthly premiums starting at just $35, Cinch is one of the most budget-friendly providers on this list. 

But don’t let the price fool you. It packs in value that rivals bigger names.

One standout feature is its $500 homeowners insurance deductible reimbursement, included with its Complete Home Plan.

 That alone sets it apart from most home warranty coverage options. 

It also covers damage from rust and corrosion, which many home warranty companies exclude despite its usefulness in humid areas like Houston.

Cinch also offers a 180-day workmanship guarantee, six times longer than the industry norm That’s one of the best repair guarantees in today’s market.

Quick Facts: Cinch Home Services

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $35
Service Fee
$100–$150 (customer selects at sign-up)
Typical Response Time
Often within 24 hours
Average Rating
4.1/5.0 on Trustpilot (4,000+ reviews)
Pros
  • Budget-friendly plans start at $35/month
  • $500 homeowners insurance deductible reimbursement
  • 180-day workmanship guarantee, longest on this list
  • Covers rust, corrosion, and unknown pre-existing conditions
Cons
  • HVAC coverage not included in the “Repair Only” plan
  • No roof leak coverage
  • Higher service request fees than competitors

Old Republic Home Protection

Old Republic Home Protection keeps things simple. And that’s exactly why many Texans love it.

If you’re the kind of homeowner who wants a no-fuss plan that covers the essentials, this provider might be your best bet.

Their home warranty plans focus squarely on major systems and important appliances (the things that typically break and cost the most to fix).

Customization is limited, but the tradeoff is a more straightforward service agreement and lower out-of-pocket costs.

With monthly premiums starting at $45 and service fees around $100, Old Republic offers better-than-average value.

Quick Facts: Old Republic Home Protection

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $45
Service Fee
Typically $100
Typical Response Time
Varies by region
Average Rating
4.1/5.0 on Trustpilot (13,000+ reviews)
Pros
  • Great for normal wear and tear on HVAC, electrical, and plumbing
  • Straightforward plans
  • Lower-than-average service request fees
Cons
  • Limited add-on options

HomeServe

HomeServe offers a different take on home warranty coverage in Texas, and it works well for homeowners who want low service fees and highly targeted protection. 

Instead of bundling everything into one plan, HomeServe allows you to pick and choose the covered systems you care about most, like plumbing, electrical, or HVAC.

To sweeten the deal, several of their plans have no service fees at all. 

That’s a massive advantage if you’re looking to reduce out-of-pocket costs on normal wear repairs.

But because each system is covered under a separate plan, achieving full comprehensive coverage can get pricey. 

You may need to purchase multiple plans to match the kind of protection you’d get from bundled providers like Liberty or options found on American Home Shield’s website.

Quick Facts: HomeServe

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $7
Service Fee
$0–$100 depending on plan
Typical Response Time
Varies by location
Average Rating
4.4/5.0 on Trustpilot (1,000+ reviews)
Pros
  • Several plans come with no service fees
  • Highly flexible, system-specific plans tailored to your needs
  • Affordable entry pricing starts at $7/month for individual plans
Cons
  • Comprehensive coverage requires stacking plans
  • Bundled options are confusing, not necessarily comprehensive

Choice Home Warranty

With one of the most affordable home warranty plans in Texas, Choice Home Warranty offers monthly premiums starting at $35 and a predictable, fixed $85 service fee. 

It’s a budget-friendly option for homeowners who want wide home warranty coverage without a complicated pricing model.

Choice’s plans cover both HVAC systems and major appliances, and they include extras that other low-cost providers skip like limited roof leak coverage.

It’s a strong fit for value-seekers who still want protection for high-cost repairs.

However, Choice’s reputation comes with a caveat. 

Despite its large customer base (49,000+ reviews on Trustpilot), it has received criticism for poor customer service and claim denials more frequently than top competitors.

Quick Facts: Choice Home Warranty

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $35
Service Fee
$85 (fixed)
Typical Response Time
Varies by region
Average Rating
4.0/5.0 on Trustpilot (49,000+ reviews)
Pros
  • Fixed $85 service fee helps homeowners budget confidently
  • Broad home warranty cover for HVAC, appliances, and more
  • Includes optional coverage for issues like roof leaks
Cons
  • Frequent reports of claim denials
  • Mixed customer service reviews
  • Fewer added perks than competitors

Home Warranty of America

Home Warranty of America (HWA) offers plans designed for both homeowners and real estate professionals, which makes it a versatile choice for a wide range of Texans. 

Known for its transparent pricing and solid HVAC coverage, HWA is a wise pick for those living in hotter climates like Houston where AC systems get put to the test.

Plans start at $46/month, and coverage includes major appliances and systems, with HVAC protection capped at $5,000. 

While the base pricing is competitive, be aware that add-on options can increase costs quickly, especially if you’re customizing coverage for a high-end or custom-built home.

Quick Facts: Home Warranty of America

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Start at $46
Service Fee
$50-$100
Typical Response Time
48 hours
Average Rating
3.9/5.0 on Trustpilot (2,000+ reviews)
Pros
  • Generous HVAC coverage, ideal for Texas heat
  • Transparent pricing, rare in the industry
  • Wide range of add-on options for upscale homes
Cons
  • Some customers report slow claim processing
  • Add-ons can raise the overall cost quickly if you're not careful

How We Picked The Top Home Warranty Companies Of 2025

Companies with the best home warranties in Texas respond quickly, partner with licensed local contractors, and actually follow through on their repair guarantees.

Here’s the criteria we used to build our list of the top home warranty companies in 2025. The companies on the list needed to meet at least 4 of 5 of these requirements in order to make the list.

Must cover critical systems and appliances

Texas homeowners face unique challenges due to the climate. Houston’s heat and humidity put a serious strain on air conditioning systems, plumbing, and electrical systems, which means warranties that skip these aren’t worth your time.

In fact, in a recent 2025 survey by Texas Homeowner Trends, 63% of respondents ranked air conditioning coverage as their top priority when choosing a home warranty in Texas.

Builders also care. They want home warranty companies that cover the systems and appliances they install to avoid post-sale arguments over repairs.

Must be priced for Texas homeowners

We only selected companies whose plans fall within the average home warranty cost range for Texas in 2025. That’s between $52 and $80 per month. 

This range reflects pricing for the Houston area, which is one of the state’s most active homebuilding markets.

Plans that are too cheap often have low coverage limits. Plans that are too expensive may not offer enough value for what they charge.

Must have strong online reviews

We only considered companies with an average customer satisfaction rating of at least 4 out of 5 stars across sites like Trustpilot.

High scores show how the company handles real-world problems and home warranty service issues effectively.

Must offer fast, reliable service within a maximum of 48 hours

Texas homes can’t afford to wait for repair when the AC unit breaks down in the middle of summer. 

Every company on our list offers quick service calls, a strong contractor network, and local availability for licensed repairs. 

The Bottom Line

There’s no one-size-fits-all when it comes to home warranty coverage in Texas, and that’s exactly why we created this guide. 

From dual AC unit coverage to low service fees and comprehensive plans with high coverage limits, each of the companies we reviewed brings something different to the table.

Here’s the short version:

  • Liberty Home Guard is our top pick for its flexibility, customer satisfaction, and coverage designed for Texas heat.
  • American Home Shield stands out for high HVAC caps and coverage for older homes with no maintenance records required.
  • And for those on a tighter budget or looking for niche protections, companies like Cinch, HomeServe, and First American still offer reliable service — even if they don’t hit every mark.

So which warranty fits your situation best?

Best For First-Time Homeowners: American Home Shield

First-time buyers often don’t know what could go wrong. 

AHS offers peace of mind with broad coverage, no maintenance history requirements, and helpful tech features like 24/7 service requests and live video chat support.

Best For Budget-Conscious Homeowners: Cinch Home Services

Starting at just $35/month, Cinch offers solid protection with extras like rust coverage and a $500 homeowners insurance deductible reimbursement. 

It’s a budget-friendly pick that still comes with a 180-day workmanship guarantee, which is one of the best in the business.

Best For Homeowners Who Want Total Coverage: Liberty Home Guard

With over 30 optional add-ons, dual AC unit coverage in the base plan, and a strong contractor network, Liberty is built for homeowners who want it all. 

It’s the best choice for anyone building a custom home or looking to cover systems that most providers skip.

If you’re building a new home in the Houston area, choosing the right home warranty company is only part of the equation. You also need a builder who cares about long-term quality, not just closing day.

At Dunn & Stone Builders, we partner with trusted home warranty providers and build every home with longevity in mind. 

Contact us today to talk about how we can help you bring your dream home vision to life.

Frequently Asked Questions

What Is The Best Home Warranty Company In Texas?

The best home warranty company in Texas is Liberty Home Guard. It offers fast service, strong customer satisfaction, and plans tailored to Texas homes, including dual AC coverage.

Which Home Warranty Providers Have The Highest Customer Satisfaction?

Liberty Home Guard and American Home Shield lead in customer satisfaction, with 4.5-star or higher ratings on review sites like Trustpilot and the Better Business Bureau.

What Does Home Warranty Coverage Typically Include?

Home warranty coverage usually includes major systems like HVAC, plumbing, and electrical, plus key appliances such as refrigerators, ovens, and washers.

Are All Home Warranty Plans Available In Texas?

No, not all home warranty plans are available in Texas. Only licensed Texas home warranty companies can offer coverage in the state.

Which Home Warranty Companies Offer The Best Repair Guarantee?

Cinch Home Services offers the best repair guarantee, with a 180-day workmanship guarantee that’s six times longer than the industry standard.

How Do I Choose Between Different Home Warranty Providers?

Look for providers with fast service times, high customer satisfaction, competitive pricing, and strong coverage for systems common in Texas homes.

What Should I Look For In Home Warranty Plans For Texas?

Look for home warranty plans that include HVAC, plumbing, and electrical systems, offer reasonable monthly rates, and have a solid contractor network for quick repairs.

Dunn & Stone Builders
On Point Custom Homes
Jamestown Estate Homes
Specializations
Luxury Semi-Custom Homes Build On Your Land
Custom Townhomes Remodels
Luxury Custom Homes
BOYL Available
✅ Yes
✅ Yes
✅ Yes
Custom Homes Available (Semi- or Fully- Custom)
✅ Yes
✅ Yes
✅ Yes
Spec Homes Available
✅ Yes
✅ Yes
✅ Yes
Financing Assistance Available
✅ Yes
✅ Yes
✅ Yes
Offers Online Warranty Claim Submission
✅ Yes
✅ Yes
✅ Yes

Our Top Pick: Dunn & Stone Builders

Rating: 4.8 on Houzz
Specializations: Build on your lot, semi-custom luxury homes, spec homes

Dunn & Stone Builders takes the top choice thanks to decades of experience building homes with an emphasis on balancing quality and customer satisfaction with unique design.

Instead of leaving you to gamble on an untested layout, we start with proven home designs that have been refined over years of real-world use.

We allow a massive range of customization, so families can still create a perfect home tailored to their needs, without worrying about layouts that don’t live well once finished.

We offer an online photo gallery that highlights completed homes where you can see exactly what we build, from timeless exteriors to the luxurious finishes inside.

We also make the process easier with financing assistance and a warranty system designed to keep homeowners happy long after move-in. 

Combine that with a strong presence in desirable communities and a reputation for strong build quality at competitive prices, we're the best choice if you're looking for a builder in Texas for 2025.

Schedule a consultation with our team to take the first step toward bringing your dream home vision to life.

Honorable Mention: Jamestown Estate Homes

Rating: 4.5 on Houzz
Specializations: Luxury custom homes, build on your lot, spec homes

Jamestown Estate Homes takes a spot for their reputation in Houston’s luxury market. 

With a history of high ratings from clients and a portfolio full of high-end designs, they’ve become an excellent choice for buyers who want something elegant, functional, and built to last.

They handle everything from build-on-your-lot projects to thoughtfully designed spec homes, but their strength is in custom work. 

If you want a home tailored to your lifestyle with the finishes and features you choose, Jamestown’s process makes it possible without losing the polish of a professionally designed plan.

Also Great: Other Home Builders Serving Houston

Legion Custom Home Builders

Rating: 4.9 on Houzz
Specializations: Luxury custom homes, remodels

Legion Custom Home Builders has become a go-to for buyers in places like Bellaire and West University who want a luxury home with real attention to detail. 

President Jason Guyer stays closely involved in projects, which shows in the quality of the work and the clear communication clients mention in reviews. 

With nearly a perfect Houzz score and strong ties to local builder associations, Legion has built a reputation that feels both personal and professional.

Colina Homes

Rating: 4.3 on Google
Specializations: Spec homes (BOYL)

Colina Homes earns a runner-up spot for one big reason: they make new homes more affordable without cutting corners on quality. 

For first-time buyers or families keeping a close eye on budget, that’s a huge deal in today’s Houston market.

And because many of their homes are in well-planned communities, buyers also get access to schools, parks, and neighborhood amenities that make day-to-day life easier.

If you’re looking for a homebuilder that keeps prices within reach while still delivering attractive, reliable homes, Colina Homes is one of the smartest choices you can make in 2025.

Zander Homes

Rating: 5.0 on Houzz
Specializations: Build on your lot, energy-efficient townhomes, energy-efficient custom homes

Zander Homes stands out with a strong focus on sustainable building practices. 

They offer custom homes and townhomes designed to maximize energy efficiency, which gives buyers great options when looking for modern style with long-term savings. 

For anyone looking for a home that’s as forward-thinking as it is functional, Zander is one of the strongest names in the city.

Toll Brothers

Rating: 4.5 on Google
Specializations: Luxury homes, new homes in planned communities

Toll Brothers brings national resources to Houston’s most popular master-planned communities, including Bridgeland, Sienna, and Cane Island. 

Their homes are known for elegant elevations, spacious floor plans, and luxury design packages that appeal to move-up buyers and families looking for a polished finish. 

Backed by decades of experience nationwide, they’ve become a reliable choice for Houston buyers who want a polished home in a neighborhood with plenty of built-in amenities.

As one of the country’s largest builders, they offer stability, a wide selection of plans, and the kind of amenities that come with large-scale developments.

Alair Homes

Rating: 5.0 on Houzz
Specializations: Custom homes, renovations

Alair Homes is part of a nationwide franchise, but each office is independently owned and rooted in its local market. 

In Houston, that means you get the backing of a larger brand while working with a team that knows the city inside and out. 

They focus on fully custom homes and major renovations, using a project management system that keeps budgets, selections, and timelines completely transparent. 

For homeowners who want a one-of-a-kind build paired with clear communication at every stage, Alair is a strong choice.

Aspire Fine Homes

Rating: 5.0 on Houzz
Specializations: Luxury custom homes

Aspire Fine Homes is a small luxury builder with a process they call the ACE Process™, designed to take the stress out of building. 

Aspire’s goal is simple: build houses that feel good to live in, not just good to look at.

Their work ranges from classic Southern-inspired homes to sleek modern designs, and each one shows careful attention to detail. 

Cityside Homes

Rating: 4.7 on Google
Specializations: Townhomes

Cityside Homes makes our list for their focus on urban infill and townhome communities throughout Houston. 

They’ve completed homes in more than 100 communities and built a reputation for pairing affordability with style in sought-after central neighborhoods. 

Their homes are designed around modern city living, often featuring rooftop terraces, pet-friendly amenities, and easy access to downtown. 

They’re a wonderful choice for buyers who want convenience and community close to the heart of Houston.

Echo Custom Homes

Rating: 5.0 on Houzz
Specializations: Custom homes, remodels, home additions

Echo Custom Homes has been building in Houston for more than twenty years, with a portfolio that shows everything from fully custom estates to high-end remodels. 

Their team puts a strong focus on collaboration to make sure the homeowner’s ideas actually guide the design. 

They’ve earned industry awards along the way, and their gallery of finished homes shows why: clean craftsmanship and projects delivered on schedule.

CRV Homes

Rating: 4.8 on Google
Specializations: Energy-efficient custom homes

CRV Homes focuses on modern, energy-efficient custom builds with styles that range from sleek contemporary to farmhouse. 

Every home comes with smart technology and EPA-backed certifications like Energy Star and WaterSense, which sets them apart in Houston’s luxury market. 

They also back their work with a 1-2-20 warranty, which is significantly stronger than the industry-standard 1-2-10 warranty. The result is that homeowners have more long-term confidence with CRV Homes than most other builders can offer.

Blum Custom Builders

Rating: 4.9 on Google
Specializations: Luxury custom homes

Blum Custom Builders has been a part of Houston’s custom home scene for more than twenty years. 

Led by Marvin Blum, the firm is known for hands-on involvement and a reputation for detail. 

Their projects have earned multiple Best of Houzz Service Awards, and their portfolio shows a mix of energy-efficient design and personalized luxury builds.

Chesmar Homes

Rating: 4.4 on Google
Specializations: New homes in planned communities

Chesmar Homes has become a fixture in Houston’s master-planned communities with a presence in neighborhoods like Elyson, Lago Mar, and Tavola. 

Their homes are designed to be move-in ready, which appeals to buyers who want a new home now

In other words, they’re not a custom home builder – but the fact that Chesmar also operates its own mortgage and title companies is what landed them on this list. 

Their homes offer a great balance of convenience, amenities, and consistent quality that keeps them on the map as one of Houston’s most reliable production builders.

Sabo Custom Home Builders

Rating: 4.8 on Google
Specializations: Luxury custom homes, major remodels

Since 2009, Sabo Custom Home Builders has focused on high-end custom homes and large-scale remodels across Houston. 

Owner Ed Sabo stays personally involved in projects, which has helped the company build a reputation for clear communication and trust. 

Their emphasis on transparency is backed by memberships in the NAHB and Greater Houston Builders Association, which makes them a wildly popular choice for homeowners who want both top-tier craftsmanship and a smooth building process from start to finish.

Southern Green Builders

Rating: 4.2 on Houzz
Specializations: Custom homes, renovations

Southern Green Builders has been shaping Houston neighborhoods like The Heights and Memorial for more than 30 years. 

They focus on custom homes and major renovations, with a process that brings architects, designers, and engineers together from the start to keep projects running smoothly. 

And there’s lots of evidence behind this quality claim. 

Their work has earned multiple Best of Houzz awards, a 2024 Star Award, and national recognition from the Best in American Living Awards. 

Unika Homes

Rating: 5.0 on Google
Specializations: Luxury custom homes

Unika Homes is a boutique builder that focuses on modern, high-end custom homes across Houston that has been featured in puiblications like Forbes and Good Housekeeping. 

Their projects lean contemporary, with clean lines and personalized details that reflect each client’s vision. 

With a perfect Google rating and a small, hands-on team, Unika has built a reputation as a great choice for buyers who want a fully tailored luxury home.

DHY Texas Builders

Rating: 5.0 on Houzz
Specializations: Luxury custom homes, remodels

DHY Texas Builders has made a name for itself with luxury custom homes and large-scale remodels across Houston. 

Recognized as a BuildZoom Top 5 Contractor from 2021 through 2024, they’ve built a reputation for strong communication and projects that stay on track. 

In reviews, their clients praise the craftsmanship and straightforward design-build process, which keeps everything under one roof from the start of the project to the final walkthrough.

Alleanza Custom Homes

Rating: 5.0 on Google
Specializations: Luxury custom homes

Alleanza Custom Homes focuses exclusively on high-end custom builds in Houston. 

Their philosophy centers on three principles: building homes, building excellence, and building trust.

And their portfolio reflects that commitment.

With more than a dozen Best of Houzz awards for both design and client satisfaction, Alleanza has built a reputation as a boutique builder that values quality and strong client relationships.

How We Picked

When we set out to highlight the top home builders in Houston for 2025, our goal was to feature builders with proven reputations and the services that matter most to buyers. 

For that reason, every builder on this list holds an average rating of 4.2 or higher on either Google Reviews or Houzz.

We looked at both platforms because builders often encourage clients to leave feedback in different places, and in this industry, Google and Houzz are the two most widely used. 

How We Selected Our Top 3 Choices

To make the cut as one of our top picks, builders had to go beyond good reviews. They needed to offer build-on-your-lot services, spec home plans, and custom options (whether semi-custom or fully tailored). 

Each company also had to provide some form of financing support, be able to build in master-planned communities, host an online warranty claim system, and they also had to have a visible online portfolio.

We also ruled out builders that only do 100% custom work. 

While those companies can produce stunning homes, untested floor plans leave too much room for error. And when you’re building a house you plan to raise a family in for the next 20 years, reliability matters. 

That’s why we focused primarily on builders who start with proven base plans that can be customized to fit each family’s needs.

How We Chose Which Builders Were Also Great

Some builders didn’t meet every one of our top-pick criteria, but they still bring a lot to the table. 

To earn a place in the Also Great section, each company still needed at least a 4.2 rating on Google or Houzz. 

But they only had to meet two or more of the standards we set for top picks. 

These are the builders that stand out for specific strengths, even if they don’t offer the full range of services.

How To Choose The Best Home Builder In Houston

Choosing a builder isn’t just about who can pour concrete and hang drywall, but who you can trust with one of your biggest investments. 

Start by looking at reputation. 

Online reviews on Google and Houzz give you a sense of how builders handle communication, timelines, and warranty service. Pay attention to patterns: consistent praise is a good sign, repeated complaints are not.

Next, study their portfolio. 

A builder’s past work shows both their design style and their attention to detail. If the photos don’t reflect the quality or look you want, keep searching.

Finally, consider how they handle the process. 

Good builders are responsive, clear about pricing, and transparent about timelines. Ask questions about warranties and what’s included so you can compare companies side by side.

Once you know what to look for in a builder, the next step is deciding which type of builder is the right fit for your goals.

Note: For more details, see our related article on how to choose the right home builder in Houston.

Custom Vs. Production Builders In Houston

Builders in Houston generally fall into three categories: production, custom, and semi-custom. 

Production builders focus on efficiency, offering a set of floor plans in master-planned communities. 

They’re great if you want affordability and predictability, but customization is limited to design packages.

Custom builders design homes from the ground up. They tailor every detail to your lot and lifestyle. This route gives you maximum freedom, but it usually costs more and takes longer.

Semi-custom builders sit in the middle. They start with proven base plans and allow you to personalize them, giving you flexibility without the risks of untested designs.

If cost and speed matter most, a production builder may be the way to go. 

If design freedom and unique features are non-negotiable, a custom or semi-custom builder will be the better choice.

Build Your Dream Home In Houston With Dunn & Stone

Choosing a builder is one of the biggest decisions you’ll make when planning a home in Houston.

Finding the right partner will give you confidence in the process and a house that feels right for the long term.

That’s where Dunn & Stone enters the picture.

At Dunn & Stone Builders, we’ve spent decades refining floor plans so they’re not just beautiful, but practical for everyday living. 

We help people build the semi-custom home of their dreams by starting with customizable, proven layouts, so you don’t have to worry about surprises once the walls go up.

With a deep portfolio of finished homes, financing support, and a reputation for quality at fair prices, we’re committed to sharing our expertise to help you navigate the home-building experience as smoothly as possible. 

If you’re ready to build the home of your dreams, get in touch with our team today.

Frequently Asked Questions

Who is the #1 home builder in Houston?

Dunn & Stone Builders is ranked as the top home builder in Houston for 2025 thanks to decades of experience, proven floor plans, and a reputation for combining custom design with everyday livability.

How much does it cost to build the perfect home in Houston?

The cost to build your dream home in Houston generally ranges from $150 to $300+ per square foot, depending on location, finishes, and whether you choose a production, semi-custom, or fully custom builder.

What’s the average build time for a new custom home?

Most new homes in Houston take 6 to 12 months to complete, with custom homes often requiring additional time for design, permitting, and specialized features.

Do Houston builders offer semi-custom options?

Yes. Many builders in Houston, including Dunn & Stone, offer semi-custom options where buyers start with a proven floor plan and personalize it to match their style, budget, and lifestyle.

Are energy-efficient homes standard in Houston?

Energy efficiency has become a standard expectation. Most Houston builders now include features like advanced insulation, efficient HVAC systems, and energy-saving appliances, with many offering green certifications for added peace of mind.

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