Texas Conventional Loan
One of the most popular types of loans, the Texas Conventional Loan is a great choice for many homebuyers
Homebuyers in Texas can apply for a Texas conventional loan to purchase the house they always dreamed of.
A conventional Texas mortgage can be a great option for buyers who have excellent credit and ample savings. If you are financially stable, a conventional loan may be the most economic mortgage option.
If you want to purchase a home this year, you may be able to qualify for a Texas conventional loan. Here’s what you need to know about applying and qualifying for a Houston conventional loan in 2026.
What is a Conventional Loan?
A conventional loan is the most common type of mortgage loan, and it is not backed by a government agency.
If you are applying for a conventional Texas mortgage, you will have to meet the requirements dictated by Fannie Mae and Freddie Mac.
Conventional loans are best for those with good credit and a low debt-to-income ratio.
Your Guide to Houston Conventional Loans
Whether you’re buying a home for the first time or looking to take on a second mortgage, you may be able to qualify for a Texas conventional loan if you have good credit and enough savings for your down payment and closing costs.
Conventional mortgages have stricter qualifying standards than some government-backed loans because they are not insured by a government agency. However, they can offer more flexibility as the buyer when you purchase a home.
While conventional loans come with more rigorous standards than most government-backed loans, they offer several unique benefits that make them a good mortgage option for first-time homebuyers. Here’s what you can expect if you decide to take on a conventional mortgage.
For many borrowers, these features make conventional loans a strong choice, even though the requirements are stricter.
- You can avoid private mortgage insurance with 20% down, or remove it later under program rules
- You can select a term length that works for you
- Loans are processed quickly
- Flexible down payment
Conventional Loan Requirements in 2026
At minimum, you will need a 620 credit score to qualify for a conventional mortgage. However, it’s best to raise your credit score to at least 740 so you can lock in the best rate.
The general rule of thumb for conventional loan down payments is 20%, but you can put down as little as 3%.
Your down payment requirement and rate will depend on your lender and your credit history.
You will have to cover appraisal and origination costs and pay mortgage insurance if your down payment is less than 20%.
In order to qualify for a conventional loan, you will have to provide proof of income and employment, authorize your lender to run a credit report, and provide proof of assets and your down payment information.
What Are The Limits On Texas Conventional Loans In 2026?
Conventional loans can be conforming or nonconforming. Conforming loans are the most common type of conventional loan.
Conforming Conventional Loans
- The baseline conforming loan limit for single-family homes is $832,750 for 2026.
- Conforming loan limits are set annually by the Federal Housing Finance Agency (FHFA).
- This limit applies to single-family homes and may be higher in high-cost areas. See our Texas conventional loan limits page.
Nonconforming Conventional Loans
- Nonconforming loans include jumbo loans, which are available for buyers who need to borrow more than the conforming loan limit.
- Other nonconforming (non-QM) loans can help borrowers whose income or credit profile does not fit standard guidelines, such as self-employed borrowers using bank statements.
- Rates, down payments and requirements for nonconforming loans vary by lender and program and are often higher than for conforming loans.
Texas Conventional Loan FAQs
What is the minimum down payment for a conventional loan?
Some conventional programs for first-time homebuyers allow as little as 3% down. Other conventional loans commonly require 5% or more, depending on the program, property type and borrower profile.
What credit score do I need for a conventional loan?
Many conventional loan programs use a minimum credit score of 620, but requirements vary by lender and program. Credit score also affects pricing, so higher scores generally qualify for better terms.
Do conventional loans require private mortgage insurance (PMI)?
PMI is typically required when you put less than 20% down on a conventional loan. Unlike FHA mortgage insurance, conventional PMI can generally be removed later once you build enough equity and meet the program's rules.
What is the conforming loan limit in Texas?
Conforming loan limits are set each year by the Federal Housing Finance Agency (FHFA), and loans above the limit are considered jumbo loans. See current figures on our Texas conventional loan limits page.
Can I use a conventional loan for a second home or investment property?
Yes. Conventional loans can be used for primary residences, second homes and investment properties, although down payment, credit and pricing requirements are typically stricter for non-owner-occupied homes.
What is the difference between a conventional loan and an FHA loan?
A conventional loan is not insured by a government agency, while an FHA loan is insured by the Federal Housing Administration. FHA loans may allow lower credit scores, but FHA mortgage insurance applies regardless of down payment, whereas conventional PMI applies only below 20% down and can usually be removed later.
Can I use gift funds for a conventional loan down payment?
Conventional loans generally allow documented gift funds from eligible donors, such as family members, for a primary residence. Gift rules vary by program and occupancy type, so confirm the details with your loan officer.
Have a question about your situation? Get a custom quote or call 888-505-1718.
Comparing Conventional Loans to Non-Traditional Loans
Conventional mortgages offer flexibility and competitive pricing for many borrowers, while government-backed loans such as FHA and VA offer their own benefits.
If you have strong credit, a larger down payment and stable finances, a conventional loan may cost less over time.
Most lenders offer FHA, VA, and conventional loans, so it pays to compare options.
Compare the total cost of each option, including the interest rate, fees and mortgage insurance, and choose the loan that best fits your situation.