Most lenders will tell you whether you qualify for a conventional loan. We start somewhere different — we help you figure out whether a conventional loan is actually the right loan, given your down payment, your credit profile, and your long-term plans for the home.
We help homebuyers and homeowners throughout North Texas, including Flower Mound, Lantana, Highland Village, Argyle, Denton, Lewisville, Grapevine, Southlake, Keller, Trophy Club, Frisco, and surrounding communities, understand whether a conventional loan fits their goals — or whether another program would serve them better.
What Is a Conventional Loan?
A conventional loan is a mortgage that isn’t insured or guaranteed by a government agency like the FHA, VA, or USDA. Instead, it follows underwriting guidelines set by Fannie Mae and Freddie Mac, the two entities that buy and standardize most conventional mortgages in the U.S.
Because conventional loans aren’t government-backed, lenders take on more of the risk — which is why they typically require somewhat stronger credit and financial documentation than FHA loans. In exchange, borrowers often get more flexibility: lower long-term costs, the ability to cancel mortgage insurance once enough equity builds up, and financing options for second homes and investment properties that government-backed loans don’t allow.
Conventional loans come in two main forms:
Conforming loans — loan amounts that fall within the limits set annually by the Federal Housing Finance Agency (FHFA). For 2026, that limit is $832,750 for a single-family home anywhere in Texas.
Jumbo loans — loan amounts above the conforming limit, which come with stricter credit and reserve requirements.
Who Conventional Loans Are For
Conventional financing tends to make sense for:
- Buyers with strong or good credit (generally 620+, though the best pricing typically starts closer to 700+)
- Buyers who can put down at least 3–5%, including many first-time buyers
- Homeowners who want to avoid lifetime mortgage insurance — unlike FHA loans, conventional PMI cancels once you reach roughly 78–80% loan-to-value
- Move-up buyers purchasing a second home
- Investors purchasing rental property, since conventional loans allow non-owner-occupied financing that FHA and VA do not
- Borrowers refinancing out of FHA specifically to eliminate mortgage insurance permanently
If your credit or savings aren’t quite there yet, that doesn’t mean conventional financing is off the table — it usually just means we look at timeline and strategy together before you apply.
Benefits of a Conventional Loan
√ Down payments as low as 3% for qualified first-time buyers
√ PMI cancels automatically once you reach 78% loan-to-value, and can often be requested even earlier at 80%
√ No upfront mortgage insurance premium, unlike FHA’s required 1.75% upfront fee
√ More flexibility on property type — primary residences, second homes, and investment properties are all eligible
√ Competitive pricing for strong credit profiles, often lower than FHA once mortgage insurance is factored in
√ Higher loan limits than FHA in most Texas counties, which matters in higher-priced North Texas markets
Requirements to Qualify
While every file is different, conventional guidelines generally look for:
Credit score: typically 620 minimum, though pricing improves meaningfully above 680–700
Down payment: as low as 3% for eligible first-time buyers, 5% for many others, more for investment or jumbo properties
Debt-to-income ratio: generally up to 45–50%, depending on the full financial picture
Stable, documented income: W-2, self-employed, and 1099 income can all qualify with the right documentation
Cash reserves: may be required for second homes, investment properties, or higher loan amounts
This is exactly where a planning-first approach matters. Two borrowers with the same credit score can qualify very differently depending on how their income, debt, and reserves are structured — we look at the full picture before recommending a path.
Texas-Specific Considerations
- 2026 conforming loan limit: $832,750 for a single-family home, applied uniformly across every Texas county — Dallas, Tarrant, Collin, and Denton included. No North Texas county currently qualifies for a higher “high-cost” conforming limit.
- Texas is a title-company state, not an attorney-closing state, which typically keeps closing costs more predictable than in many other parts of the country.
- Property taxes matter more here than in most states. Texas has no state income tax, which shifts more of the funding burden onto property taxes — meaning your escrow account, not just your principal and interest, deserves real attention when comparing monthly payments.
- No state-level down payment assistance mandate, but Texas-specific programs (such as those through TSAHC and TDHCA) can sometimes be paired with conventional financing for qualifying buyers — worth a conversation before you assume 3–5% down is your only option.
North Texas Considerations
Denton County — home values have continued to outpace many neighboring counties, which affects both down payment planning and long-term equity strategy for buyers in Flower Mound, Highland Village, Lantana, and Argyle.
Property taxes and escrow — North Texas municipal and school district tax rates vary meaningfully block-to-block in some areas. We factor your actual projected escrow into your payment estimate rather than a rough estimate, since it changes the real number more than most buyers expect.
HOA communities — many North Texas neighborhoods, particularly newer developments in Argyle, Northlake, and parts of Frisco, carry HOA dues that affect your qualifying debt-to-income ratio. These get factored into your approval, not just your monthly budget.
New construction — with continued new-build activity across Denton and Collin counties, conventional financing is often the most straightforward path for builder-buyer transactions, particularly when a rate lock needs to stretch across a longer build timeline.
Local market conditions — inventory and pricing shift by submarket, not just by county. What’s true for Flower Mound may not be true for Denton proper. We talk through what’s actually happening in your specific area, not a generic DFW headline.
Frequently Asked Questions
What credit score do I need for a conventional loan in Texas?
Most conventional loans require a minimum credit score of 620, though borrowers with scores above 680–700 typically qualify for meaningfully better pricing. We’ll walk through where your score puts you and whether it’s worth waiting to improve it before applying.
How much down payment do I need for a conventional loan?
Qualified first-time buyers can put down as little as 3%. Most other conventional buyers put down 5% or more, and investment properties typically require 15–25% down.
When does PMI go away on a conventional loan?
Private mortgage insurance automatically cancels once your loan balance reaches 78% of your home’s original value, and you can often request cancellation once you reach 80%. This is a key difference from FHA loans, where mortgage insurance can last the life of the loan.
Can I use a conventional loan for a second home or investment property?
Yes. Unlike FHA and VA loans, conventional financing allows second homes and non-owner-occupied investment properties, though down payment and reserve requirements are typically higher.
What’s the conventional loan limit in North Texas for 2026?
$832,750 for a single-family home, which applies statewide across Texas — including Dallas, Tarrant, Collin, and Denton counties. Loan amounts above that figure fall into jumbo financing.
Is a conventional loan always better than FHA?
Not always — it depends on your credit, down payment, and how long you plan to stay in the home. This is exactly the kind of comparison we run before recommending either path.
Learn More About Conventional Financing
Before deciding whether a conventional loan is the right fit, explore our educational resources:
Conventional vs. FHA: Which Loan Is Right for You?
Understanding PMI and When It Goes Away
How Much Down Payment Do You Really Need?
Conventional Loans for Second Homes and Investment Properties
What Debt-to-Income Ratio Do Lenders Actually Use?
Ready to Talk Through Your Options?
Every borrower’s situation is different, and the right loan program depends on more than just your credit score. Let’s look at your full picture together and figure out whether a conventional loan — or something else — actually makes the most sense for your goals.
Get Pre-Qualified →
Texas Mortgage Plan is a d/b/a of Legacy Mortgage, NMLS# 1759275. Elizabeth Rose, NMLS# 252686. Shea Patton, NMLS# 251397. Equal Housing Lender.