Landlord to keep deposit after misrepresenting house?

My husband and I live in Texas. We were preapproved for a home loan and began the process when laws and rules changed we were unable to purchase the home we picked after paying for inspection, appraisal etc...The original owners of home offered to lease the home to us for one year but we were required to forfeit the $500 earnest deposit plus we put an additional $1000 deposit down with a written provision that we would forfeit the $1000 if we chose not to purchase in 1 year.

Afer settling in to the home we received a letter from Fema that the house has sustained 3 major floods and the house exceeds the maximum loss, therefore another claim would put the house into buy from fema. When we were undergoing the purchase of home this information was not released, with the exception of 1 flood claim to the garage only. The house was misrepresented and is illegal to not disclose this information in the state of texas. We now settled into this home with the intentions to buy next year can't purchase a home that has been not fully disclosed of the damages to it.
Do we have a leg to stand on for getting our deposit or any additional costs back since we would never of invested any money or moved into a home that has sustained major flood claims? The landlord do not know we are aware of this situation and we hope to find out our legal rights before approaching the matter.

We would appreciate any help here,
Sandie

Yes you should get that back; they misled you in a material way and that either voids the agreement or puts them in breach of it. Either way you should not have to pay any fees since you cannot buy. You of course will be expected to pay rent for any period you are there.

Actually, it depends. Were those 2 other claims made by these owners? Or were they made by former owners? If they were made by former owners, the current owners may have had no knowledge of those former claims. (They may not have been disclosed to them at signing.) They are only required to disclose KNOWN defects. The onus is on you to prove they knew about those former claims. If you can prove they knew about those claims, you should be able to terminate the purchase contract and receive the $1000 deposit back. If the claims were made by other owners and were never disclosed to the current owners, they may not have known to disclose them to you. You might ask FEMA if a letter stating the status of future buyback for any further claim was sent to the owners when they filed the claim on the garage. This would prove they knew and would get you a return of your deposit.

The original $500 earnest money was forfeited when you failed to obtain financing for the house as required in the sales contract. That has nothing to do with this deposit.