First-Time Homebuyer Guide: Texas Hill Country & I-35

Buying your first home in the Texas Hill Country or along I-35 comes down to four steps: get pre-approved, budget for property taxes, explore state assistance, and do local due diligence.

This first-time homebuyer guide covers the stretch of Texas our Boerne and Horseshoe Bay teams know best. That’s the limestone hills of the Austin-Waco-Hill Country land region and the fast-growing interstate towns from San Antonio up through Austin. Below you’ll find current prices and mortgage rates, the two state agencies that help with down payments, the Texas contract clause every first-time buyer should understand, and the rural details that catch city buyers off guard. If you’re still deciding whether now is the time, start with our post on whether to buy or rent, then come back here.

Where do the Hill Country and the I-35 corridor meet?

The I-35 corridor runs along the eastern edge of the Hill Country. Interstate 35 links San Antonio in Bexar County to New Braunfels in Comal County, San Marcos in Hays County, Austin in Travis County, and Round Rock and Georgetown in Williamson County. West of the highway, the land climbs into the hills of the Austin-Waco-Hill Country region, which takes in Boerne and Comfort in Kendall County, Kerrville in Kerr County and Fredericksburg in Gillespie County.

For a first-time buyer, the line between the two matters more than it looks on a map. Towns along I-35 usually offer more new construction, more resale homes in established subdivisions, city water and sewer, and shorter drives to the big employment centers. The Hill Country towns trade some of that convenience for bigger lots, older homes with character and a slower pace. They also more often come with private wells, septic systems and longer drives. Boerne, for example, sits on the Interstate 10 corridor northwest of San Antonio, not on I-35, so a buyer working in north Austin and one working in northwest San Antonio will draw very different maps.

The smart first move is to mark where you work, how often you go in, and the longest drive you’ll put up with. Then look at homes inside that circle. Our post on Kerrville and New Braunfels compares one Hill Country market with one I-35 market.

Limestone ranch-style starter home with a live oak in the front yard on a quiet Hill Country street near Boerne, Texas

What do homes cost for first-time buyers right now?

As of September 2026, Texas’s median home price was $330,000, and the I-35 metros sat on either side of it. In San Antonio, the San Antonio Board of Realtors put the September median just below $302,000. In the Austin-Round Rock-San Marcos metro, Unlock MLS reported a September median of $421,000.

Prices differ a good deal between counties. In September 2026, Unlock MLS reported a median of $399,900 in Hays County, up 10.8 percent from a year earlier, and $395,000 in Williamson County, down 2.5 percent. The Hill Country towns west of San Antonio cost more. The San Antonio Board of Realtors’ fourth-quarter 2025 report for Kendall County showed a median of $627,900. That’s why many first-time buyers browsing homes for sale in Boerne TX also look at Comfort TX homes, smaller houses in nearby towns, or the I-35 suburbs before deciding. Our Kendall County page is a good place to see what’s on the market there.

Borrowing costs matter just as much as price. Freddie Mac’s survey put the average 30-year fixed rate at 7.40 percent as of October 15, 2026, up from 6.27 percent a year earlier. The Texas Real Estate Research Center’s 2026 forecast expected only a small rise in the statewide median, to around $334,000 for the year. In plain terms, prices have been fairly steady, financing has gotten more expensive, and buyers have more time to shop than they did a few years ago. Get pre-approved by a lender before you tour homes, so your budget reflects today’s rate and not last year’s.

Interstate 35 at dusk between New Braunfels and San Marcos in Central Texas

What first-time homebuyer programs does Texas offer?

Texas has two statewide sources of help. The Texas Department of Housing and Community Affairs (TDHCA) runs the My First Texas Home program. The Texas State Affordable Housing Corporation (TSAHC) runs the Home Sweet Texas and Homes for Texas Heroes loan programs. Both offer 30-year fixed-rate mortgages along with down payment and closing cost assistance.

TDHCA’s My First Texas Home program is open to first-time buyers and qualified veterans. It pairs a low-interest loan with up to 5 percent in down payment and closing cost assistance. According to TDHCA’s program sheet, you need a credit score of at least 620, you must meet income and purchase price limits set by county, and you must work with a TDHCA-approved loan officer. TDHCA generally treats you as a first-time buyer if you haven’t owned a primary residence in the past three years.

TSAHC’s homebuyer programs offer up to 5 percent of the loan amount toward the down payment or closing costs, with credit scores as low as 620. Home Sweet Texas serves low- and moderate-income households, and repeat buyers can use it too.

Income and price limits are set county by county, so a buyer who qualifies in Hays County may get a different answer in Kerr County. Ask a participating lender to run your numbers for the specific county you’re shopping in. Our post on what first-time homebuyers should know in 2026 covers credit, savings and the pre-approval process in more detail.

How does the Texas option period protect a buyer?

The option period is a negotiated number of days, starting after both sides sign the contract, when the buyer can cancel for any reason and get their earnest money back. You pay the seller a small option fee for that right. The Texas Real Estate Research Center explains that the option period gives buyers time to do more than a walk-through before fully committing to the purchase.

The details matter. The standard contract from the Texas Real Estate Commission (TREC) requires the buyer to deliver the earnest money and the option fee to the escrow agent within three days of the contract’s effective date. Under TREC’s guidance, a buyer who never delivers the option fee generally loses the right to cancel for any reason. Days are counted as calendar days, and notice of termination is due by 5:00 p.m. local time on the last day.

Use those days for your inspections. In the Hill Country that often means more than a general home inspection: a septic inspection, a well and water-quality check, and a close look at the roof, foundation and any outbuildings. If something turns up, you can ask for repairs, ask for a price reduction or walk away, as long as you act before the deadline. Your agent and your real estate attorney can explain how the clause applies to your contract.

What should a first-time buyer check on a Hill Country home?

Check where the water comes from, where the wastewater goes, and what the deed restrictions allow. In-town homes in Boerne, Kerrville or Fair Oaks Ranch are usually on city utilities. Many homes on the edge of town or on acreage depend on a private well and an on-site septic system instead.

In Texas, septic systems are officially called on-site sewage facilities, or OSSFs. The Texas Commission on Environmental Quality (TCEQ) regulates them together with local authorized agents, which are usually the county. TCEQ’s owner guidance says you need a permit and an approved plan to build, alter, repair, extend or operate a septic system. Texas has no single statewide rule requiring a septic inspection when a home sells, but many buyers order one during the option period, and some lenders require it. Ask the county for the original OSSF permit so you know what kind of system you’re buying, and find out whether it’s an aerobic unit. Aerobic units need ongoing maintenance.

Beyond water and septic, read the subdivision’s deed restrictions and any HOA documents before your option period ends. Many Hill Country subdivisions limit outbuildings, livestock, short-term rentals or fencing. If you’re shopping Fair Oaks Ranch TX homes or anywhere near a creek, ask your lender and insurance agent early about floodplain status and insurance costs, since both affect your monthly payment. For the bigger picture of owning land here, see our comprehensive guide for Hill Country landowners.

Historic downtown Boerne Main Plaza with shops and shade trees in the Texas Hill Country

How does the homestead exemption lower your tax bill?

A residence homestead exemption takes part of your home’s value off the tax rolls, and you have to apply for it. According to the Texas Comptroller Tax Code Section 11.13(b) requires school districts to exempt $140,000 of a homestead’s value. Section 11.13(n) lets any taxing unit add a local option exemption of up to 20 percent of appraised value.

The Comptroller’s own example shows the effect. A home appraised at $300,000 with the $140,000 exemption pays school taxes as if it were worth $160,000. Your city, county and other taxing units each set their own exemptions, so your savings depend on where the home sits.

You file Comptroller Form 50-114 with the appraisal district for the county where the home is located, generally by April 30 of the year after you buy. Our step-by-step guide to walks through the paperwork. We aren’t tax advisors, so confirm your eligibility and deadlines with your county appraisal district or your CPA.

Your first steps with a Hill Country agent

Start with a lender pre-approval, a list of the counties that fit your drive, and an agent who knows both the interstate towns and the hills. A local agent can tell you which subdivisions are on city sewer, which roads flood, and which listings are priced to sell.

Our works with buyers at every price point, from first homes to forever homes. You can meet our agents in Boerne and the Highland Lakes before you start touring. When you’re ready,, and we’ll help you build a plan that fits your budget, your commute and the way you want to live in Central Texas.

Frequently Asked Questions

Are there affordable homes for sale in Boerne TX for first-time buyers?

Yes, but Kendall County costs well above the state median. The San Antonio Board of Realtors’ fourth-quarter 2025 Kendall County report showed a median of $627,900. Many first-time buyers compare Boerne with nearby towns and the I-35 suburbs, where medians are lower.

Can I use state down payment assistance to buy a home in Kerrville TX?

TDHCA and TSAHC programs are available statewide, including Kerr County, and offer up to 5 percent of the loan amount toward the down payment or closing costs. Income and purchase price limits differ by county, so ask a participating lender to confirm you qualify.

What is the average 30-year mortgage rate in October 2026?

Freddie Mac’s survey put the average 30-year fixed rate at 7.40 percent as of October 15, 2026. A year earlier it was 6.27 percent. Your own rate will depend on your credit, down payment and loan type.

Who counts as a first-time homebuyer in Texas?

TDHCA generally counts you as a first-time buyer if you haven’t owned a primary residence in the past three years. Qualified veterans can use My First Texas Home even if they owned a home recently.

How long is the option period on a Texas home purchase?

The buyer and seller negotiate the number of days, and it’s written into the TREC contract. Days are counted as calendar days, and termination notice is due by 5:00 p.m. local time on the last day. The option fee has to reach the escrow agent within three days of the effective date.

Do I need a septic inspection when buying a Hill Country home?

Texas has no single statewide rule requiring one when a home sells. Many buyers order a septic inspection during the option period, though, and some lenders require it. Check your county’s rules and ask for the original OSSF permit.

When should I file my Texas homestead exemption?

You file Form 50-114 with your county appraisal district, generally by April 30 of the year after you buy. Confirm the deadline and your eligibility with the appraisal district or your CPA.