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Yes, and you have to dig deep in some places to get below the frost with your foundation. In those places a basement makes sense because you’re digging that far either way. Texas frosts don’t get very deep, so you’re able to have a shallower foundation making a basement just an extra cost.
Yes, drinking water is cleaned to the point that it will not make you sick to drink assuming a normal immune system. That is extreme over kill for bathing (and toilets, laundry, etc). The only reason we use drinking water for everything is because infrastructure is expensive and laying non-potable water pipes would cost tons.