Do you have to use the builder's lender to get the incentive in Texas?

Not to buy the house. Usually yes, to get the advertised rate or buydown — and that is lawful, because a discount conditioned on using an affiliated lender is not what the federal rule calls "required use," provided the discount is optional and genuinely a discount rather than a cost moved somewhere else.

That is the whole answer. The rest of this page is where each half of it comes from, what the builders themselves print, and the one place the law does draw a hard line — which is not the lender.

What does the builder's own paperwork actually say?

Both halves of the answer, usually in the same sentence, in type small enough that most buyers never read it.

D.R. Horton publishes its current Texas financing terms in the disclaimer under the promotion on its community pages. The copy read for this page, stamped "REV: 10/19/26," says:

"Buyer is not required to finance through DHIM to purchase a home; however, buyer must use DHIM to receive the advertised rate and buydown incentive. Additional closing costs will apply. May not be able to be combined with other available D.R. Horton offers or discounts."

DHIM is identified on the same page: "Financing offered by DHI Mortgage Company, Ltd. (DHIM)," and, in its own sentence, "DHIM is an affiliate of D.R. Horton."

Read that first sentence twice, because the two clauses do different work. The first clause is the builder complying with a federal condition. The second clause is the builder exercising a freedom that the same federal rule leaves open to it. Nothing about that is a loophole — it is the structure the rule was written to create.

KB Home words the same arrangement differently on its agent page, dated "©2025 KB Home (KBH)":

"KB Home and KBHS share common ownership and because of this relationship may receive a financial or other benefit. You are not required to use KBHS as a condition of purchase or sale of any real estate."

KBHS is named on the page as "KBHS Home Loans, LLC NMLS 1542802."

Two things are worth saying plainly about these quotes. First, they are two builders' terms and they are not interchangeable — KB Home's page includes the financial-benefit sentence and the D.R. Horton pages read for this piece do not, and D.R. Horton's pages tie a specific rate to the affiliate where KB Home's agent page states no such condition for the rate it advertises there. Second, builder terms change constantly. Both D.R. Horton pages carry their own expiry language, and one of them adds "D.R. Horton may cancel or change all offers without prior notice." Get the current terms for the community you are actually buying in, in writing, rather than relying on anything quoted here.

What does the federal rule mean by "required use"?

This is the definition the whole question turns on, and it is worth reading in full rather than in summary. It sits in Regulation X, the rule implementing the Real Estate Settlement Procedures Act, at 12 CFR 1024.2(b):

"Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service. However, the offering of a package (or combination of settlement services) or the offering of discounts or rebates to consumers for the purchase of multiple settlement services does not constitute a required use. Any package or discount must be optional to the purchaser. The discount must be a true discount below the prices that are otherwise generally available, and must not be made up by higher costs elsewhere in the settlement process."

Four sentences, and the last three are the ones nobody quotes.

The first sentence describes the problem: being made to use a particular provider to get access to something else. On its face, "you must use our lender to get this rate" looks like exactly that.

The second sentence then takes discounts out of the definition. Offering discounts or rebates for the purchase of multiple settlement services "does not constitute a required use." That is the sentence that makes a financing incentive possible at all.

The third and fourth sentences are the conditions. "Any package or discount must be optional to the purchaser" — which is why D.R. Horton's disclaimer says you are not required to finance through DHIM to purchase a home. And "The discount must be a true discount below the prices that are otherwise generally available, and must not be made up by higher costs elsewhere in the settlement process."

That last clause is the buyer's whole protection, and it is the only part of the rule that cannot be satisfied by printing a sentence. Whether a discount is true, and whether it has been made up elsewhere, is a question about numbers in a particular transaction — not a question about disclosure language.

Where does the prohibition on requiring a provider come from?

From the statute, and then from the regulation that carries it out.

RESPA's section 8 prohibits kickbacks and unearned fees, and then lists things it does not prohibit. The fourth of those permits affiliated business arrangements, on three conditions. The second condition, at 12 U.S.C. § 2607(c)(4)(B), is nine words long:

"such person is not required to use any particular provider of settlement services"

Regulation X restates the same condition at 12 CFR 1024.15(b)(2), and this version matters more in practice because of what it puts in brackets:

"No person making a referral has required (as defined in § 1024.2, 'required use') any person to use any particular provider of settlement services or business incident thereto, except if such person is a lender, for requiring a buyer, borrower or seller to pay for the services of an attorney, credit reporting agency, or real estate appraiser chosen by the lender to represent the lender's interest in a real estate transaction..."

"Required" in that sentence means required as defined in § 1024.2. So the rule's prohibition and the rule's carve-out for discounts are the same provision read in two places. A conditional incentive is not a prohibited requirement, because the definition says a discount is not a requirement.

The framing provision, at 12 CFR 1024.15(b), explains what satisfying these conditions buys the builder: "An affiliated business arrangement is not a violation of section 8 of RESPA (12 U.S.C. 2607) and of § 1024.14 if the conditions set forth in this section are satisfied."

Does the rule actually contemplate builders, or is that a reading?

It names them. This is unusual and worth knowing, because most of the provisions that govern new construction have to be applied to builders by reading general words.

The definitions in 12 CFR 1024.15(c) include this one:

"Person who is in a position to refer settlement service business means any real estate broker or agent, lender, mortgage broker, builder or developer, attorney, title company, title agent, or other person deriving a significant portion of his or her gross income from providing settlement services."

"Builder or developer," in the regulation's own list. A builder referring you to its affiliated mortgage company is squarely the arrangement this section was written about.

What disclosure are you entitled to, and when?

A specific form, on its own sheet of paper, at a specific moment.

12 CFR 1024.15(b)(1) requires the person making the referral to provide a written disclosure "in the format of the Affiliated Business Arrangement Disclosure Statement set forth in appendix D of this part," covering "the nature of the relationship (explaining the ownership and financial interest)" and "an estimated charge or range of charges generally made by such provider."

On timing, the same paragraph says the disclosures "must be provided on a separate piece of paper no later than the time of each referral or, if the lender requires use of a particular provider, the time of loan application." Not at closing. At the referral.

Appendix D sets out the model language. Its opening paragraph reads:

"This is to give you notice that [referring party] has a business relationship with [settlement services provider(s)]. [Describe the nature of the relationship between the referring party and the provider(s), including percentage of ownership interest, if applicable.] Because of this relationship, this referral may provide [referring party] a financial or other benefit."

And then the paragraph that answers the question in this page's title, in the regulation's own capital letters:

"Set forth below is the estimated charge or range of charges for the settlement services listed. You are NOT required to use the listed provider(s) as a condition for [settlement of your loan on] [or] [purchase, sale, or refinance of] the subject property. THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES."

One more detail from the same section, at 12 CFR 1024.15(d), which is useful if a question comes up years later: "Any documents provided pursuant to this section shall be retained for 5 years after the date of execution."

So if you are being steered toward a builder's affiliated lender, title company or insurance agency, there is a form that is supposed to reach you on paper at the time of the referral, naming the ownership relationship and estimating the charges. If you have not seen it, that is a reasonable thing to ask about before you go further.

Can a builder require you to use its title company?

No — and this is the hard line the lender question does not have.

RESPA section 9, at 12 U.S.C. § 2608(a), reads in full:

"No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company."

And § 2608(b) attaches a remedy: a seller who violates it "shall be liable to the buyer in an amount equal to three times all charges made for such title insurance."

Note the difference in kind. For the lender, the statute's condition is part of a safe harbour the builder can satisfy and then still offer a conditional discount. For title insurance, the statute states a flat prohibition on requiring a particular company as a condition of the sale, with treble damages attached.

The Texas Department of Insurance states the buyer's side of it in one sentence on its title insurance FAQ, and it names builders:

"You may choose any title company you want; you don't have to use a company selected by a real estate agent, builder, or lender."

TDI also cites the federal provision on the same page: "Section 9 of the Real Estate Settlement Procedures Act (RESPA) prohibits sellers from conditioning the home sale on the use of a specific title insurance company." Read the two sentences precisely: TDI's choice sentence names builders, while the RESPA sentence it quotes speaks of "sellers." Whether a particular builder is a "seller" for the purposes of § 2608 in a particular transaction is a legal question, and nothing read for this page answers it.

There is one more Texas fact that changes what shopping title is even for, and it comes from the same TDI page: "Title insurance rates in Texas are regulated. All title companies will charge the same premium for a policy," and "The premium rate is set by the Texas Department of Insurance." What does vary, in TDI's words: "You can shop around for cheaper escrow fees, or closing costs. These differ between agents." So in Texas the choice of title company is not a price shop on the premium. It is a shop on escrow and closing fees, and on service.

How do the three things a builder can tie an incentive to compare?

This table sets out what the sources quoted above print. It is a description of the provisions, not a prediction about any particular builder or transaction.

	The builder's affiliated lender	The builder's affiliated title company	The builder's own contract form
May the builder refuse to sell you the house unless you use it?	No — 12 U.S.C. § 2607(c)(4)(B) conditions the affiliated-business safe harbour on the buyer "not required to use any particular provider of settlement services"	No — § 2608(a) bars requiring title insurance from "any particular title company" as "a condition to selling the property"	Not applicable — the form is the builder's to choose
May the builder condition a price or rate incentive on it?	Yes — a discount "does not constitute a required use" under 12 CFR 1024.2(b), if optional and a true discount	Not answered by any source read for this page; § 2608 addresses conditions on selling, and whether a conditional discount falls inside that is a legal question	Not applicable
Is there a disclosure form?	Yes — the Appendix D Affiliated Business Arrangement Disclosure Statement, on a separate sheet, at the time of the referral	Yes — the same form covers any affiliated settlement service provider	No — the Commission's contract rule carries no disclosure requirement for an owner-prepared form
What you can actually verify yourself	One competing quote on the same loan, same day, all costs in	Escrow and closing fees, which TDI says "differ between agents"; the premium itself does not vary	Read it, and have an attorney read it
Who regulates it	CFPB, under RESPA and Regulation X	CFPB under RESPA; TDI for Texas title rates and agents	TREC regulates the licence holder, not the builder

The middle column of the first row is the one that surprises people. The protection on title insurance is stronger than the protection on financing, not weaker.

What does "a true discount" mean in practice?

It means an arithmetic question, and the rule gives you the test: a discount "below the prices that are otherwise generally available," which "must not be made up by higher costs elsewhere in the settlement process."

So the only way to evaluate a builder's financing incentive is to price the same loan twice. The details that make the comparison honest are mundane and easy to get wrong:

Same day. Rates move. A quote from last week against a quote from today compares the market, not the lenders.

Same loan. Same programme, same term, same down payment, same lock period. D.R. Horton's disclaimer is explicit that its advertised rate is not universal: "Not all borrowers will qualify for said rate. Rate is not applicable for all credit profiles and may require borrower to pay points to obtain the advertised rate." Its own terms also require a cost to get the rate — "To receive this offer, borrower is REQUIRED to pay a 0.375% discount point" — and note that "Discount points may be paid with seller financing incentive offered to the borrower, which will be represented on the Closing Disclosure as a seller's cost."

All costs in, not just the rate. The same disclaimer says "Additional closing costs will apply." A rate comparison that stops at the rate is not the comparison the rule describes.

Check whether the incentive is tied to the lender at all. Not all of them are. On one of the D.R. Horton pages read, a separate programme is described as "up to $1,000 in closing costs (available with the use of any lender) or up to $1,000 toward design options with a new home purchase." Lender-tied and lender-neutral incentives can sit on the same page, and the difference is in the parenthesis.

Treat the published figures as illustrations. The two D.R. Horton community pages read for this page — one in Sherman, one in Aubrey — carried the identical price, loan amount and buydown cost despite being different communities. Figures in a promotion are examples. Your figures come from the sales contract and the Closing Disclosure.

One structural point that explains why builder rates can genuinely be lower, in the builder's own words: "D.R. Horton has locked-in, through DHIM, a fixed interest rate for a pool of funds," and "Rates only available until pool of funds is depleted or rate expires." A forward-committed pool is a real mechanism, not a marketing phrase. It also means the offer is finite, which is a reason to compare early rather than a reason to skip comparing.

What should you ask before you sign?

Five questions, all of which are answerable from documents the builder already has.

1. "Is the incentive available with any lender, or only with yours?" The answer is usually in a parenthesis in the disclaimer. Get it in writing for your community, not from a national page.
2. "What does the incentive become if I use my own lender?" Sometimes a smaller number, sometimes nothing, sometimes a different incentive entirely. It is a question with a specific answer.
3. "May I have the affiliated business arrangement disclosure now?" Regulation X expects it on a separate sheet at the time of the referral, naming the ownership relationship and estimating the charges.
4. "What are the total costs, not just the rate?" Points, lender fees, and anything the incentive is being spent on rather than given to you. D.R. Horton's own terms describe a buyer choosing whether to spend the seller incentive on closing costs "OR to fund the temporary buydown cost" — the same money, two uses.
5. "Who is handling title and escrow, and what are the escrow and closing fees?" The premium will be the same wherever you go in Texas. The fees around it will not.

None of that is adversarial. An affiliated lender is often genuinely competitive, and the rate pool described above is a real advantage a national builder can have that a local lender cannot match. The point of comparing is not to catch anyone out. It is that the rule's own test for whether the discount is real is a comparison, and nobody can run it for you except you.

What this page deliberately does not answer

Being straight about the limits is part of the answer.

• Whether a particular incentive is a "true discount" under the rule. That depends on the numbers in your transaction and on prices otherwise generally available to you. No page can tell you, and this one does not try.
• Whether a particular builder's arrangement complies with RESPA. That is a legal conclusion about a specific set of facts. It belongs to a lawyer and, if something has gone wrong, to the Consumer Financial Protection Bureau, which TDI's own page names as the regulator of RESPA.
• Whether an incentive conditioned on using the builder's affiliated title company is permitted. The two provisions pull in different directions on their face — Regulation X's discount carve-out and § 2608's flat prohibition on conditioning a sale — and no source read for this page reconciles them. Do not read the table above as saying it is allowed; read it as saying nothing here answers it.
• Whether Texas law adds its own prohibition. Chapter 2502 of the Texas Insurance Code, titled "Prohibited Conduct," was read in full for this page. Its subchapters cover prohibited coverages, insuring around, and rebates and discounts. No section of that chapter prohibits requiring the use of a particular title company or title agent as a condition of a sale. The prohibition quoted above is federal. Other chapters of Title 11 of the Insurance Code were not read.
• Any statement about mortgage terms as advice. An agent explains the process and holds the timeline. The loan comparison is between you, your lender and a licensed loan originator; the legal effect of a document is for an attorney; the tax treatment of seller-paid costs is for a CPA.

Sources

Each entry notes whether it is a primary or a secondary source, because on this topic the distinction decides how much weight a quote can carry.

1. 12 CFR 1024.2(b), definition of "required use" — read 24 October 2026 from the Consumer Financial Protection Bureau's own Interactive Bureau Regulations copy at https://www.consumerfinance.gov/rules-policy/regulations/1024/2/. Primary — the issuing agency's own publication of its own rule. The page states "This version is the current regulation" and prints no as-of date. The phrases "bona fide discount," "attributable solely to" and "offered separately" do not appear in this definition and are not quoted here; the rule says "in whole or in part."
2. 12 CFR 1024.15 (Affiliated business arrangements) — read 24 October 2026 from the same CFPB source at https://www.consumerfinance.gov/rules-policy/regulations/1024/15/, primary, and corroborated word for word against the eCFR copy at https://www.ecfr.gov/current/title-12/chapter-X/part-1024/subpart-B/section-1024.15, which is secondary and labels itself "authoritative but unofficial." The eCFR copy states "Displaying title 12, up to date as of 10/21/2026. Title 12 was last amended 10/02/2026." The two differ only in a dash character. The term "controlled business arrangement" appears on neither.
3. Appendix D to Part 1024, Affiliated Business Arrangement Disclosure Statement Format Notice — read 24 October 2026 from the CFPB's own copy at https://www.consumerfinance.gov/rules-policy/regulations/1024/d/. Primary. The "You are NOT required" sentence appears in the appendix's paragraph A only; paragraph B, for lender-required attorneys, credit reporting agencies and appraisers, carries no such sentence.
4. 12 U.S.C. § 2608 (RESPA section 9, "Title companies; liability of seller") — read 24 October 2026 from the official U.S. Code published by the Office of the Law Revision Counsel at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2608. Primary. The page states "Text contains those laws in effect on September 29, 2026." Corroborated word for word by Cornell Legal Information Institute, a secondary restatement; the only difference is spacing in the source credit.
5. 12 U.S.C. § 2607 (RESPA section 8, "Prohibition against kickbacks and unearned fees") — read 24 October 2026 from three secondary restatements only: Cornell Legal Information Institute, which prints no currency date; Justia, labelled "2024 U.S. Code" and "Laws In Effect As Of Date: January 6, 2025"; and FindLaw, labelled "Current as of January 01, 2024." All three print § 2607(c)(4)(B) identically. The official OLRC copy of § 2607 could not be read — uscode.house.gov served a site-maintenance placeholder for that section on 24 October 2026. So the § 2607 quote above rests on restatements, and the three publishers' currency dates disagree with each other.
6. Texas Department of Insurance, "Title insurance FAQ" — read 24 October 2026 at https://agate.tdi.texas.gov/title/titlefaqs.html. Primary as a state agency publication, but it is a consumer explainer, not the Insurance Code or TDI's rules. Printed date: "Last updated: 3/19/2024." The page's own metadata gives its canonical address as https://www.tdi.texas.gov/title/titlefaqs.html. Its illustrative premium figures are not quoted here, because they predate the current promulgated rate schedule.
7. Texas Insurance Code, Title 11, Subtitle A, Chapter 2502 ("Prohibited Conduct") — read 24 October 2026 at https://tcss.legis.texas.gov/resources/IN/htm/IN.2502.htm, a Texas legislative host. Read for a Texas analogue to § 2608 and cited above only for what it does not contain. The page prints no currency date, only section-level enactment history.
8. D.R. Horton Texas community pages — read 24 October 2026 at https://www.drhorton.com/texas/dallas/sherman/hanolley-hills/qmis/908-jefferson-way and https://www.drhorton.com/texas/dallas/aubrey/silverado/qmis/4824-steer-rd. Primary for that builder's own published terms. Both stamped "REV: 10/19/26." Both are marketing pages with the terms in a disclaimer, not standalone terms documents, and both were truncated partway through retrieval — every D.R. Horton sentence quoted above comes from the verbatim portion, and nothing is quoted from the summarised remainder. The two pages carried identical illustrative figures for two different communities, which is why no figure from them is presented as applying to any home.
9. KB Home, "For Real Estate Agents" — read 24 October 2026 at https://www.kbhome.com/for-agents. Primary for that builder's own terms. A national page with a multi-state selector, not a Texas-specific document; its broker disclaimer is dated "©2025 KB Home (KBH)." The conditions attached to the rate it advertises there sit on a separate page that was not read.
10. Lennar — https://www.lennar.com/new-homes/texas/dallas-fort-worth returned a client error on 24 October 2026 and no Lennar terms were read. Three builders' pages were sought; two were retrieved.

Nothing on this page is legal, tax or lending advice. Dreams 2 Doorsteps explains process. An attorney advises on the legal effect of a document, a CPA on tax, and a licensed loan originator on loan terms.