Conventional · Conforming
Conventional loans are the most common mortgage in America for a reason: competitive rates, flexible terms, and mortgage insurance that goes away. If your credit and income are solid, this is often the most cost-effective path to your Texas home.
The basics
A conventional loan is a mortgage not backed by a government agency like the FHA or VA. Instead, most conform to standards set by Fannie Mae and Freddie Mac — which is why you'll hear them called 'conforming' loans. They're the default choice for buyers with solid credit and steady income.
The appeal is flexibility and long-term cost. Qualified buyers — including some first-timers — can put down as little as 3%, and unlike FHA, the private mortgage insurance (PMI) on a conventional loan isn't permanent: it cancels once you reach 20% equity, lowering your payment for the rest of the loan.
Conventional loans also stretch further than government programs in some directions — they can finance primary homes, second homes, and investment properties, up to the annual conforming loan limit for your county. Above that limit, you move into jumbo territory, which we also handle.
Best suited for
✓ Buyers with strong credit and steady income
✓ Anyone who wants PMI to eventually disappear
✓ Buyers putting down 5–20% (or 3% if eligible)
✓ Second homes and investment properties
✓ Loan amounts within the conforming limit
Requirements
Conventional underwriting rewards credit strength. Here's the general shape — exact tiers vary and we'll match you to the best pricing.
The details
Government loans grab headlines with low down payments, but for strong-credit buyers the conventional loan frequently costs less over time. Here's where the advantages live.
The single biggest long-term advantage: conventional PMI cancels automatically as you reach 20–22% equity, or you can request removal at 20%. FHA mortgage insurance often lasts the life of the loan.
Conventional rates are tiered by credit score and down payment. If your credit is strong, you're often rewarded with pricing that beats government programs — worth comparing side by side.
The 2026 conforming limit is $832,750 for a one-unit home, and it applies to every Texas county — no county in the state qualifies as high-cost. Loans within that figure get standard conventional terms; above it, you are in jumbo territory.
Unlike FHA and VA, conventional financing covers second homes and investment properties, making it the backbone of many Texas buyers' and owners' plans.
Conventional guidelines allow gift funds for down payment on primary homes and offer flexible structures — including options to avoid PMI with combined financing in the right situations.
This page is reviewed by Jonathan Sarver, a licensed Texas loan officer. Have a question about your specific situation in Austin or the Hill Country? Reach out directly — a real person, licensed in Texas, will answer.
Answers
As little as 3% for some qualified first-time buyers, and commonly 5% otherwise. Putting down 20% removes private mortgage insurance entirely. More down generally means better pricing.
If you put down less than 20%, you'll pay private mortgage insurance (PMI) — but unlike FHA, it isn't permanent. PMI cancels as you reach roughly 20–22% equity, lowering your payment for the rest of the loan.
It depends on your credit and down payment. FHA is often better for lower credit scores or minimal down payment; conventional usually wins for strong credit because of better pricing and PMI that cancels. We compare both for your exact numbers.
Yes. Conventional financing can cover primary residences, second homes, and 1–4 unit investment properties — one of its advantages over government-backed programs, which are generally limited to primary homes.
Conforming limits are set annually and vary by county, with higher-cost areas above the national baseline. Loans within the limit get standard conventional terms; above it, you're in jumbo territory. We'll confirm your county's current limit.
Ready when you are
Get a side-by-side look at conventional versus your other options from a licensed Texas loan officer — free, no obligation.
Compare my optionsThis is not a commitment to lend. All loans subject to credit approval, income and asset verification, and property appraisal. Rates and terms vary and are not guaranteed.