Texas Mortgage & Housing Policy Watch: October 2026

This is the October 2026 policy watch for buyers in Greater San Antonio and the Texas Hill Country. The direct answer: rates moved up and the agencies that price mortgages moved a fee grid on October 1, but the programs that help you buy are unchanged. Every figure is dated and sourced, and this is not a loan offer.

Rates and the Federal Reserve

Freddie Mac's Primary Mortgage Market Survey put the average 30-year fixed rate at 7.40% for the weeks ending October 8 and 15, 2026, up from 7.28% on October 1 and 6.34% a year earlier. On September 16, the Federal Reserve raised its target funds range a quarter point to 3.75% to 4.00%, its first hike since 2023, and signaled one more increase is possible this year. For you: heavier monthly payment math, so the levers that keep payments down, seller concessions, buydowns, down payment assistance, and the right loan type matter more now. The October rent vs. buy update runs the payment math, and pre-approval sets your real number.

Fannie Mae and Freddie Mac: Pricing Aligned, Credit Checks Getting Simpler

Two changes worth knowing. First, effective for loans purchased on or after October 1, 2026, Fannie Mae and Freddie Mac aligned their loan-level price adjustments, the fee baked into your rate, into one pricing grid across the two credit score models, FICO and VantageScore 4.0. They also expanded VantageScore 4.0 to all lenders on September 9. Plain English: pricing is more predictable now. Second, FHFA said on October 1 it plans to require only two-bureau credit reports instead of three, which should trim a cost for borrowers; not finalized as of mid-October. If the score talk feels familiar, the number on your phone app is not the number the lender uses.

Down Payment Assistance: Nothing New, Still In Force

No changes this month. TSAHC's Home Sweet Texas and Homes for Texas Heroes remain open on a first-come, first-served basis. The 2026 headline still in force: income limits raised to 150% of area median family income for Home Sweet Texas and 170% for Homes for Texas Heroes, effective June 13, 2026. Assistance stays up to 5% of the loan amount, as a grant or a three-year 0% forgivable second, minimum credit 620 for government loans and 640 for conventional. Funding can shift, so confirm availability with a TSAHC-approved lender. The full rundown is in the 2026 Texas DPA guide and the Home Sweet Texas explainer.

Texas Property Taxes: Hold Two Numbers

Two numbers still in force. First, the general homestead exemption for school district taxes is $140,000 for the 2026 tax year, up from $100,000, and the 10% annual appraisal cap on homesteads still applies. Second, the temporary 20% cap on annual appraisal increases for non-homestead properties, rentals, second homes, and vacant lots expires December 31, 2026 with no extension passed, so some tax bills can jump in 2027. For buyers: file your homestead exemption right after closing, it is free, and the deadline is April 30. See the homestead how-to and the Bulverde and Spring Branch tax breakdown.

TREC Buyer Rules: A Recap, Nothing New

No new TREC rule for buyers took effect in the last two months. Still in force this year: since January 1, an agent must have a written agreement before showing you a home, and a "showing only" non-representation status exists. Since July 1, the contract forms were renumbered and a standalone Water Notice (TREC Form 61-0) on groundwater and surface water rights is part of deals, which matters for well and septic properties across the Hill Country. That one is covered in the wells and septic buyer guide.

Scam Alert: Homestead "Filing Fee" Mailers

Worth a warning every month until it stops. Across Texas in 2026, appraisal districts have flagged official-looking mailers offering to file your homestead exemption for $30 to $100, sometimes with a fake deadline. Filing a homestead exemption with your county appraisal district is free. No third party needs to be paid, and you can file online in minutes. If a mailer asks for money or banking details to "process" a homestead exemption, it did not come from the appraisal district. The homestead guide links the official filing portals.

The San Antonio Market in One Paragraph

SABOR's September 2026 report, released in mid-October, put closed sales down about 2% year over year, the median price down about 2% to roughly $303,000, inventory near six months of supply, homes averaging about 88 days on the market, and about 9 in 10 sellers getting their asking price. Plain English: more selection, more time, more room to negotiate. The full picture is in the 2026 San Antonio market guide.

Frequently Asked Questions

Sources

• Freddie Mac PMMS, "Mortgage Rates Hold Steady at 7.40%" (week ending October 15, 2026).
• Freddie Mac PMMS, "Mortgage Rates Average 7.40%" (week ending October 8, 2026) and "Mortgage Rates Average 7.28%" (October 1, 2026).
• Federal Reserve FOMC statement (September 16, 2026): target range raised to 3.75% to 4.00%, first hike since 2023.
• FHFA, "Credit Scores" (updated September 30, 2026): Fannie and Freddie LLPAs aligned across FICO and VantageScore 4.0, effective for loans purchased on or after October 1, 2026.
• HousingWire, "FHFA to move Fannie, Freddie to bi-merge credit checks" (October 1, 2026).
• TSAHC, "What Higher Income Limits Mean for Texas Home Buyers" (July 10, 2026): limits effective June 13, 2026, still in force as of October 2026.
• TREC, "What Changes in 2026 About Buyer/Tenant Representation in Texas" and TREC Form 61-0 Water Notice.
• Fort Bend Central Appraisal District, "Homestead Designation Services Consumer Alert" and Harris County Appraisal District consumer alerts: homestead filing is free; beware paid filing mailers.
• Texas Public Radio, "September home sales and prices dip in San Antonio" (October 16, 2026): SABOR September 2026 data, median near $303,000, about six months of inventory, about 88 days on market.
• Ballard Property Tax Protest, "7 Texas Property Tax Law Changes for 2026" and PropertyTaxDesk, "Texas 20% Appraisal Cap Expires Dec. 31, 2026": homestead exemption at $140,000, 10% cap in force, 20% non-homestead cap expiring.

Sincerely,
Patrick, The Mortgage Patriot

This policy watch reflects data researched on October 20, 2026: the Freddie Mac PMMS releases of October 1, 8, and 15, 2026; the Federal Reserve FOMC statement of September 16, 2026; the FHFA credit score and pricing alignment effective October 1, 2026; TSAHC income limits effective June 13, 2026; TREC rules and forms in force for 2026; appraisal district homestead consumer alerts; and SABOR's September 2026 report. Mortgage rates and program funding move quickly, so verify current numbers before making a decision. This is educational information, not a loan offer, a quote, or a commitment to lend.