Conventional Home Loans in Texas

Conventional loans are mortgage loans that are not insured or guaranteed by a government agency such as FHA, VA, or USDA. These loans adhere to guidelines set by Fannie Mae and Freddie Mac and are the most common type of mortgage in Texas.

Texas homebuyers often choose conventional loans for their flexibility, competitive rates, and fewer restrictions compared to government-backed loans. For qualified borrowers, conventional loans can offer significant advantages in the competitive Texas housing market.

Minimum 620 FICO score required, but 740+ scores receive the best interest rates

As low as 3% for first-time homebuyers

Generally capped at 45%, though some lenders may allow up to 50% with strong compensating factors

In most Texas counties: $726,200 (2024) for single-family homes

Required if down payment is less than 20%, can be removed once you reach 20% equity

These loans maintain the same interest rate throughout the entire loan term, usually 15 or 30 years. They provide stability and predictability in your monthly payments, making them ideal for homeowners planning to stay in their Texas home long-term.

These loans start with a fixed rate for a specified period (typically 3, 5, 7, or 10 years), then adjust periodically based on market conditions. ARMs often offer lower initial rates, which can be advantageous for buyers planning to move or refinance within a few years

Aim for a score of 740+ to qualify for the best interest rates. Pay down credit card balances, avoid new credit applications, and resolve any credit report errors.

A 20% down payment allows you to avoid PMI altogether, resulting in lower monthly payments and potentially better interest rates.

Pay down existing debts to improve your DTI ratio, making you more attractive to lenders and potentially qualifying you for better loan terms.