Conventional Loans

2026 Texas Conventional Loan Guidelines

• Freddie Mac & Fannie Mae conventional loan programs

• Primary, second home, and investment property eligibility

• Single-family, multi-family, condo, and approved manufactured homes

• Loan amounts up to $832,750 (2026 limits)

• Financing up to 97% LTV (95% LTV for high-balance loans)

• Flexible mortgage insurance options with competitive pricing

A Texas conventional loan is a mortgage option not insured or guaranteed by the federal government, offering borrowers a straightforward path to homeownership with competitive interest rates and flexible terms. Unlike FHA or VA loans, conventional loans in Texas suit buyers with higher credit and lower debt, offering better terms and more flexibility in property and loan options. Ideal for home purchases or refinances.

Conventional loans are available for the purchase of a primary residence, for investment properties, or for second mortgages. It is necessary to have good credit and a substantial savings. While conventional loans come with tougher underwriting standards compared to most government backed loans like Texas FHA Loans, Texas VA Loans and USDA loans, they still offer several advantages that make conventional loans the best option. Here are a few of the advantages of conventional home loans in Texas:

• Eliminates PMI (private mortgage insurance)
• You can select the term length that works best you
• Conventional loans can be processed more quickly and closed faster
• Flexible Down Payments

Conventional loans offer several advantages for borrowers. They often come with competitive interest rates and flexible terms, allowing for customization of monthly payments and loan durations. Because they aren’t backed by the government, they generally offer fewer restrictions on property types and use, which can be advantageous for buyers looking at unique or high-value properties. Additionally, if you make a down payment of at least 20%, you can avoid private mortgage insurance (PMI), potentially lowering your overall costs. Conventional loans also tend to have more straightforward qualification requirements, especially for those with good credit histories, making them a flexible and accessible option for many homebuyers.

FIXED RATE LOANS:  A fixed conventional loan is a popular mortgage option where the interest rate remains constant throughout the life of the loan, providing predictable monthly payments and stability for borrowers. This type of loan is ideal for those who prefer the security of knowing their payments won’t fluctuate with market conditions. Typically available in various term lengths, such as 15, 20, or 30 years, fixed conventional loans offer flexibility in choosing a term that fits your financial situation. With its consistent payments and straightforward terms, a fixed conventional loan is a reliable choice for managing homeownership costs effectively.

ADJUSTABLE RATE LOANS: Are known as ARM’s are also available with all mortgage products although are limited with FHA, USDA and VA mortgages. ARM’s are a great fit for home buyers in Texas who plan to sell or refinance their home within 1 to 5 years after purchase. An adjustable rate mortgage begins as a fixed rate for a specific period of time and then the rate adjusts on predetermined time period based on financial index and a fixed margin. In order to qualify for a Texas conventional loan, you need good credit and a large savings account.

Key Features of Conventional Home Loans:

1. Down Payment: Conventional loans typically require a down payment, which can range from as low as 3% for some loan programs to higher percentages for others. Generally speaking, a larger down payment will result in better loan terms.
2. Private Mortgage Insurance (PMI): If the down payment is less than 20%, lenders usually require PMI, which helps to protects the lender in case of default. It’s generally advised for borrowers to remove PMI once enough equity has been built up.
3. Interest Rates: Conventional loans in Texas can have fixed or adjustable interest rates. Fixed-rate loans maintain the same interest rate throughout the life of the loan, while adjustable-rate loans can change periodically based on mortgage indexes and market conditions.
4. Texas Loan Limits: Conventional loans are subject to conforming loan limits set by the Federal Housing Finance Agency (FHFA). Loans in Texas that exceed $832,750 are considered jumbo loans, which may have stricter qualification criteria and higher interest rates.
5. Credit Requirements: Conventional loans typically require a higher credit score compared to government-backed loans. But the upside with going conventional is that these loans are more flexibility and can accommodate a wider range of credit profiles.
6. Mortgage Terms: Conventional loans usually come with terms of 15, 20, or 30 years, allowing borrowers to choose a repayment period that fits their financial situation.

Lone Star Financing is a direct lender for conventional loans in Texas. Our loan officers have helped thousands of Texans close on conventional loans and we can help structure the perfect loan just for you. Call or Apply online to receive a free rate quote and good faith estimate.