Conventional Loans in Texas

Conventional mortgages are the most widely used home loan in Texas, offering competitive rates, flexible terms, and low-cost financing for buyers with strong credit profiles. Whether you’re a first-time buyer, upgrading, downsizing, or investing, Conventional loans provide powerful advantages — especially for borrowers who want to avoid mortgage insurance or have a sizable down payment.

If you’re looking for low fees, strong long-term pricing, and multiple loan term options, a Conventional loan may be the best fit.

Why Choose a Conventional Loan?

Low down payment options starting at 3%
No upfront mortgage insurance** (unlike FHA)
Mortgage insurance can be removed once you reach 20% equity
Lower monthly mortgage insurance costs compared to FHA
Flexible loan terms (15-, 20-, 30-year fixed or adjustable-rate options)
Great solution for buyers with good-to-excellent credit
Ideal for higher-priced homes and borrowers wanting fewer restrictions

Conventional loans reward buyers with stronger credit and stable financial profiles with lower long-term borrowing costs.

Conventional Loan Requirements

Here’s what you typically need to qualify for a Conventional mortgage:

Credit Score

620 minimum required
Higher scores unlock lower rates and reduced mortgage insurance

Down Payment Options

3% down for first-time buyers or HomeReady/Home Possible programs
5% down for most standard Conventional loans
20% down eliminates mortgage insurance completely

Debt-to-Income Ratio (DTI)

Typical DTI limits:

Generally up to 45% for most borrowers
Up to 50% with strong compensating factors

Employment & Income

Two-year employment history preferred
Self-employed borrowers allowed with proper documentation
Bonus, overtime, and commission income can qualify with history

Conventional Loan Limits in Texas (2025)

Conventional loans follow conforming loan limits set by the Federal Housing Finance Agency (FHFA). For 2025, many Texas counties use these baseline limits:

$766,550 for single-family homes (1-unit)
Higher limits available for 2- to 4-unit properties

Some higher-cost Texas markets may qualify for expanded limits. I can check your county’s exact numbers for you.

Private Mortgage Insurance (PMI)

Unlike FHA, Conventional mortgage insurance:

Is cancellable once you reach 20% equity
Automatically drops off at 78% loan-to-value
Is risk-based — higher credit scores mean cheaper PMI

This is one of the biggest advantages for qualified borrowers who want long-term savings.

Types of Conventional Loans

Standard Conventional Loans — most common option
HomeReady® & Home Possible® — reduced down payment + lower PMI
Jumbo Conventional Loans — for homes above conforming limits
Fixed-rate loans — stable monthly payments
Adjustable-rate mortgages (ARMs) — lower initial rates

Conventional vs FHA — Which Is Better?

Conventional loans may be better for buyers who:

Have good to excellent credit
Want removable mortgage insurance
Plan to make a larger down payment
Prefer fewer property restrictions

FHA may be better for buyers who:

Have lower credit scores or recent credit challenges
Need higher DTI flexibility
Want to use gift funds extensively

I can run a side-by-side comparison to show which program saves you more money long-term.

Want a Detailed Conventional Loan Breakdown?

I’m preparing a full Conventional loan guide similar to my USDA and FHA articles. Once complete, I’ll link it here for deeper reading.

Coming soon: “Conventional Loans in Texas: Rate Factors, PMI, and Qualification Guide”

Get Pre-Approved for a Conventional Loan

If you have solid credit, stable income, and are looking for long-term cost savings, a Conventional mortgage could be the smartest financial choice. I’ll walk you through your loan options, calculate your maximum buying power, and help you secure the best rate available.

Apply Online:
https://wayne-wallace.com/apply

Schedule a Call:
Schedule a 30-Minute Consultation

Your homeownership goals are within reach — let’s take the next step together.