Conventional Home Loans
Conventional Loans in Texas
The most common loan type in the U.S. — and a flexible fit for buyers with established credit. Available for primary residences, second homes, and investment properties.
The most common loan type in the U.S. — and a flexible fit for buyers with established credit. Available for primary residences, second homes, and investment properties.
Conventional loans aren’t insured by a government agency, which gives them flexibility on property types and terms. For buyers with steady income and a healthy credit history, they often deliver some of the strongest overall terms.
Solid score and history can translate to better terms.
Government-backed loans usually can’t — Conventional often can.
PMI typically ends once you reach the required equity threshold.
These are the core requirements I check first when a Texas buyer asks whether they qualify for a conventional loan. Nothing here is a hard wall on its own — underwriting looks at the whole file, and a strength in one area often offsets a weakness in another. Call or text me at 469-545-7180 and I'll tell you exactly where you stand against each line.
| Minimum credit score | 620 (higher scores earn better rates and lower PMI) |
|---|---|
| Minimum down payment | 3% first-time buyers · 5% standard · 20% to avoid PMI |
| Debt-to-income (DTI) | Typically up to 45% per Fannie Mae/Freddie Mac AUS, and as high as 50% with strong compensating factors |
| Mortgage insurance | PMI required under 20% down · cancellable at 80% LTV, automatic at 78% |
| Employment history | Generally 2 years documented, self-employed included |
| Property types | Primary residence, second home, or investment property |
| 2026 conforming limit | $832,750 for a single-family home across every DFW county |
| Pre-approval / closing timeline | Pre-approval in 24–72 hours · most DFW purchases close in 30–45 days |
620 is the usual floor for conventional financing, but it's a floor and not a target. Because PMI on a conventional loan is priced by credit score — unlike FHA's flat MIP structure — moving from the low 600s into the 700s can lower both your rate and your monthly mortgage insurance.
| Credit score band | Rate impact | Illustrative PMI on a $350K home, 5% down |
|---|---|---|
| 620–679 | Highest conventional rate tier | ~$210–$300/mo |
| 680–719 | Standard rate tier | ~$150–$210/mo |
| 720–739 | Below-standard (better) rate tier | ~$110–$150/mo |
| 740+ | Best available conventional rate tier | ~$70–$110/mo |
Illustrative PMI ranges only — your actual quote depends on the specific investor grid, loan-to-value, and coverage requirement. Call or text me at 469-545-7180 for your exact number.
First-time buyers can go as low as 3% down on qualifying conventional programs, and 5% is standard for repeat buyers. You do not need 20% down to get a conventional loan — 20% is simply the point where PMI drops off from the start.
| Down payment | Loan-to-value | PMI required? | Notes |
|---|---|---|---|
| 3% | 97% LTV | Yes | Fannie Mae HomeReady / Freddie Mac Home Possible — first-time-buyer eligible |
| 5% | 95% LTV | Yes | Most common conventional down payment for repeat buyers |
| 10% | 90% LTV | Yes, meaningfully lower cost | Noticeably cuts monthly PMI vs. 5% down |
| 20%+ | 80% LTV or lower | No | PMI-free starting day one |
For buyers who want to keep cash in reserve, putting less down and paying PMI temporarily is frequently the better call, and I run that comparison both ways. Down payment assistance through TSAHC, TDHCA, or Dallas DHAP can also stack with a conventional loan for eligible first-time buyers — it isn't just an FHA tool.
Most conventional approvals land at or under 45% DTI per Fannie Mae/Freddie Mac automated underwriting, though the AUS will stretch toward 50% when there are compensating factors like strong reserves or a high credit score. This is the requirement that trips up the most Texas buyers, largely because property taxes here run high and inflate the housing portion of the calculation.
PMI applies whenever you put less than 20% down, but unlike FHA's MIP it is not permanent. You can request removal once you reach 80% loan-to-value, and your servicer must cancel it automatically at 78%. That single difference is why I steer many buyers with solid credit toward conventional financing even when FHA would also approve them.
| Units | 2026 conforming limit |
|---|---|
| 1-unit (single-family) | $832,750 |
| 2-unit (duplex) | $1,066,250 |
| 3-unit (triplex) | $1,288,800 |
| 4-unit (fourplex) | $1,601,750 |
Dallas, Collin, Denton, Tarrant, Rockwall, and Kaufman counties all share this same baseline — there is no high-cost county adjustment within DFW for 2026. Anything above these figures moves into jumbo financing.
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Min. down payment | 3% | 3.5% | 0% | 0% |
| Min. credit score | 620 | 580 | No set minimum (lender overlays ~580–620) | 640 |
| Mortgage insurance | PMI, cancellable at 80% LTV | MIP, often life of loan | None (funding fee at closing) | Annual fee ~0.35% |
| 2026 loan limit (1-unit) | $832,750 | $563,500 | No cap (entitlement-based) | No set limit; income-limited instead |
| Property type | Primary, 2nd home, investment | Primary only | Primary only | Primary only |
| Income limit | None | None | None | DFW metro: $139,300 (1–4) / $183,900 (5–8) |
| Eligible areas | Anywhere | Anywhere | Anywhere | USDA-eligible areas only |
Want these run against your actual numbers rather than a general checklist? Call or text me at 469-545-7180, or compare programs in my FHA loan guide and my FHA vs. conventional breakdown.
I helped a Garland buyer last year with a 690 credit score and 5% down on a $310,000 home — her DTI came in at 42% once we counted her full income, and she qualified for conventional financing with a monthly PMI right around $180. A repeat buyer in Mesquite with a 650 score chose 10% down instead of 5% specifically to cut his PMI cost, since Dallas County's property tax rate was already pushing his housing-ratio close to the ceiling. And a move-up buyer in Plano with a 745 score put 20% down on a $550,000 purchase to avoid PMI entirely and stay comfortably under the $832,750 conforming limit rather than crossing into jumbo territory.