All Products/Conventional
Conventional Loans · Houston & Greater Texas

Conventional Mortgage.
The Gold Standard.

Flexible terms, competitive pricing, and broader eligibility than most buyers realize. For a wide range of Houston homebuyers — first-timers to move-up buyers — conventional is often the best-fit loan.

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At a Glance

Conventional Loan Basics

3%
Minimum Down Payment (qualifying buyers)
620+
Minimum Credit Score (most programs)
45%
Max Debt-to-Income (standard; higher with strong file)
No PMI
At 20%+ Down — or removable later
Why Conventional

Built for the Houston Market

Conventional loans follow Fannie Mae and Freddie Mac guidelines — and they're the backbone of Houston's home purchase market, from Katy to Kingwood to Sugar Land.

  • No upfront mortgage insurance premium (unlike FHA)
  • PMI automatically cancels when you reach 20% equity
  • Available for primary, second home, and investment properties
  • Loan limits up to conforming maximum (check current limits)
  • 15, 20, and 30-year fixed terms available
  • Adjustable-rate options for shorter hold periods
  • Works for condos, townhomes, PUDs, and single-family
  • New construction eligible (buyers)

Is Conventional Right for You?

Conventional tends to win for buyers with 5%+ down, strong credit (700+), and stable W-2 income. But it's competitive even at 3% down if the numbers work.

20%+
Down → No PMI. One of conventional's biggest advantages over FHA.
5–10%
Down → PMI required, but often cheaper long-term than FHA MIP.
3%
Down → Available to first-time buyers and qualifying income levels.
680+
Credit → Where conventional pricing typically beats FHA.
Benefits

Why Most Houston Buyers Choose Conventional

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PMI Is Removable

Unlike FHA's mortgage insurance, conventional PMI drops off once you hit 20% equity — either through payments or appreciation. FHA MIP can last the life of the loan.

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More Property Types

Conventional lenders have more flexibility on property condition than FHA or VA. That means more options in Houston's resale market.

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Self-Employed Friendly

Two years of tax returns can work for self-employed borrowers. Bank statement programs also available for certain scenarios.

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Second Homes & Investments

Conventional is available for second homes and investment properties — something FHA doesn't offer. Great for buyers building a portfolio.

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Flexible DTI

With strong compensating factors, conventional loans can go to 45–50% DTI. It's not a one-size number.

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Faster Closing Timelines

Conventional loans typically close in 21–30 days in competitive Houston markets. No government overlays to slow things down.

Common Questions

Conventional Loan FAQs

Conventional loans are not government-backed — they're sold on the secondary market through Fannie Mae and Freddie Mac. FHA loans are insured by the Federal Housing Administration and typically require lower credit scores and smaller down payments. The trade-off: FHA charges an upfront mortgage insurance premium plus monthly MIP, often for the life of the loan. Conventional PMI goes away at 20% equity. Buyers with 680+ credit and 5%+ down often save money over time with conventional.
Yes — Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow as little as 3% down for qualifying first-time buyers or those at or below area median income. These programs have income limits, so they don't apply to everyone. Standard conventional purchases require at least 5% down for primary residences (if not a first-time buyer).
PMI (private mortgage insurance) typically costs between 0.2% and 1.5% of the loan amount annually, depending on your credit score, LTV, and lender. On a $350,000 loan with 5% down and good credit, PMI might run $70–$200 per month. The key advantage: once you reach 20% equity, you can request PMI removal — or it cancels automatically at 22% LTV based on original amortization.
Yes. Conventional loans are widely used for new construction purchases in Houston — from Katy master-planned communities to custom builds. If the home is complete or nearly complete (certificate of occupancy issued), a standard conventional purchase works. For true construction-to-permanent financing, see our construction loan page.

Let's See If Conventional Is Your Best Fit

Tyler will compare conventional, FHA, and other options side-by-side for your specific numbers. No pressure, no fluff — just an honest breakdown.

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