TurkMortgages.com (a team of NEXA Mortgage, LLC) · Ethan Morgan NMLS #2738407 · NEXA Mortgage, LLC Corp NMLS #1660690
Texas-specific guidelines, 2026 loan limits, PMI breakdowns, qualification scenarios, and everything you need to make the right decision.
A conventional loan is a mortgage not backed by a government agency (unlike FHA, VA, or USDA loans). Conforming conventional loans follow guidelines set by Fannie Mae and Freddie Mac and can be sold on the secondary market. Because of this, they typically offer competitive rates and maximum flexibility for a wide range of buyers.
Conventional loans are available for primary residences, second homes, and investment properties — a key advantage over government-backed programs. They offer both fixed-rate and adjustable-rate (ARM) options across multiple terms.
In Texas for 2026, the conforming loan limit is $832,750 for a single-unit property. Texas has no high-cost counties (unlike California or New York), so this limit applies statewide. Loans above this amount require a Jumbo loan with different qualifying standards.
Unlike California, New York, or Hawaii, Texas has NO FHFA-designated high-cost counties. This means every Texas county uses the same $832,750 conforming limit — you get full conventional loan access statewide without geographic restrictions.
| Credit Score | Down Payment | PMI Impact | Eligibility | Best For |
|---|---|---|---|---|
| 760+ | 3% minimum | Lowest PMI rates available | ✓ Best pricing | Rate + PMI optimal |
| 740–759 | 3% minimum | Near-best PMI rates | ✓ Excellent | Most borrowers target this |
| 720–739 | 3% minimum | Slightly higher PMI | ✓ Very good | Strong qualification |
| 700–719 | 3% minimum | Moderate PMI increase | ✓ Good | Standard approval |
| 680–699 | 3% minimum | Noticeable PMI cost | ✓ Qualified | Consider FHA comparison |
| 660–679 | 5% typically needed | Higher PMI, higher rate | ✓ Marginal | Compare FHA carefully |
| 640–659 | 10% often required | Very high PMI cost | ✓ Limited | FHA likely better option |
| 620–639 | 10–20% often required | Maximum PMI tier | ✓ Minimum | FHA almost always better |
| Below 620 | N/A | N/A | ✗ Not eligible | FHA/VA alternatives |
| Down Payment | Loan Amount ($400K home) | PMI Required | Program | Notes |
|---|---|---|---|---|
| 3% | $388,000 | Yes | HomeReady / Home Possible | Income limits may apply |
| 5% | $380,000 | Yes | Standard Conventional | Most common entry point |
| 10% | $360,000 | Yes | Standard Conventional | Lower PMI than 5% |
| 15% | $340,000 | Yes | Standard Conventional | PMI significantly reduced |
| 20% | $320,000 | No PMI | Standard Conventional | Sweet spot — no PMI ever |
| 25%+ | $300,000 or less | No PMI | Standard / Jumbo | Best rates, lowest risk |
DTI = All monthly debt payments ÷ Gross monthly income × 100
| DTI Range | Status | Approval Path | Notes |
|---|---|---|---|
| Under 36% | ✓ Excellent | Automatic approval (DU/LP) | Strongest profile |
| 36–43% | ✓ Standard | Automated approval | Most borrowers fall here |
| 43–45% | ✓ Acceptable | Automated with good factors | Strong credit/reserves help |
| 45–50% | ✓ Possible | Compensating factors required | 700+ credit, large reserves |
| Above 50% | ✗ Typically declined | Manual exception only | Consider government loan |
Credit score 720+, 12+ months of PITI reserves in bank, minimal payment shock from current rent/payment, strong employment history (5+ years same employer), down payment 20%+.
| Property Type | Reserves Required | Source |
|---|---|---|
| Primary Residence (1 unit) | 0–2 months PITI | Bank, retirement (60%), gift (primary only) |
| Primary Residence (2–4 unit) | 2–6 months PITI | Bank, retirement accounts |
| Second Home | 2 months PITI | Bank, retirement, investments |
| Investment Property | 6 months PITI | Bank/investment only (no gift) |
| Multiple financed properties | 2–6 months each | Verification of all properties |
PMI protects the lender if you default when your down payment is less than 20%. Unlike FHA's MIP, conventional PMI can be canceled — and unlike government loans, you pay NO upfront premium.
By law (Homeowners Protection Act), PMI automatically cancels at 22% equity. You can request removal at 20%. FHA MIP (for loans originated after 2013 with less than 10% down) stays for the LIFE of the loan. This makes conventional the better long-term choice for most buyers with good credit.
| Credit Score | 3% Down | 5% Down | 10% Down | 15% Down | 20%+ Down |
|---|---|---|---|---|---|
| 760+ | 0.17% | 0.14% | 0.10% | 0.06% | No PMI |
| 740–759 | 0.37% | 0.27% | 0.17% | 0.10% | No PMI |
| 720–739 | 0.57% | 0.40% | 0.25% | 0.15% | No PMI |
| 700–719 | 0.77% | 0.57% | 0.35% | 0.20% | No PMI |
| 680–699 | 1.25% | 0.85% | 0.55% | 0.32% | No PMI |
| 660–679 | 1.65% | 1.25% | 0.80% | 0.48% | No PMI |
| 640–659 | 2.10% | 1.75% | 1.15% | 0.70% | No PMI |
| 620–639 | 2.80% | 2.25% | 1.55% | 0.95% | No PMI |
* Rates are estimates. Actual PMI varies by lender, loan program, and market conditions. Monthly cost = (Loan Amount × Annual Rate) ÷ 12.
$380,000 loan · 0.14% PMI
$380,000 loan · 0.57% PMI
| Cost Item | Typical Range | Who Pays | Notes |
|---|---|---|---|
| Origination Fee | 0 – 1% of loan | Buyer (negotiable) | Can be offset by rate |
| Appraisal | $500 – $750 | Buyer | Required for all purchases |
| Title Insurance (Owner) | 0.5 – 1% of price | Buyer (or seller) | Custom in TX: seller pays |
| Title Insurance (Lender) | 0.25 – 0.5% | Buyer | Required by lender |
| Escrow / Settlement | $400 – $700 | Buyer | Closing attorney/title co. |
| Survey | $400 – $600 | Buyer | Often required in TX |
| Prepaid Interest | Varies by close date | Buyer | Per diem × days to month end |
| Property Tax Escrow | 2–6 months | Buyer | TX property taxes are HIGH |
| Homeowner Insurance | $1,800–$4,000/yr | Buyer | Texas rates above national avg |
| Total Typical Closing Costs | 2% – 4% of loan | Buyer | Seller can contribute 3–9% |
All scenarios assume 30-year fixed rate of 6.875% (rate for illustration — contact Ethan for current rate). Texas property tax rate estimated at 2.1% average.
W-2, 720 credit, 5% down · $350,000 home
W-2, 760 credit, 20% down · $520,000 home
Self-employed, 740 credit, 25% down · $280,000
Dual income, 750 credit, 10% down · $460,000
Remove MIP · 680 credit · $290,000 balance
740 credit, 5% down · $820,000 home (near limit)
As a NEXA Mortgage broker, Ethan has access to 200+ wholesale lenders and shops them all simultaneously to find you competitive rates and terms. The lenders below are key NEXA wholesale partners used for conventional loans — you never deal with them directly; Ethan handles everything on your behalf.
Retail banks and direct lenders mark up their rates. NEXA's wholesale channel accesses the same lenders at institutional pricing — typically 0.25–0.50% lower than retail. On a $400,000 loan that's $50–$100/month in savings, or $18,000–$36,000 over the life of the loan.
| Factor | NEXA Broker (Ethan Morgan) | Retail Bank / Direct Lender |
|---|---|---|
| Rate access | Wholesale pricing — no retail markup | Retail rate — 0.25–0.50% markup built in |
| Lender options | Shops 200+ lenders for best fit | Only their own products |
| Complex files | Can route to the right lender for your profile | Limited to their own guidelines |
| Cost transparency | Legally required broker fee disclosure | Retail margin may not be disclosed |
| Personal service | Direct access to Ethan — Turkish & English | Call center, loan officer may change |
| Estimated savings on $400K loan | $50–$100/month potential savings | Baseline |
Ethan reviews your file and gets pricing from all eligible NEXA wholesale partners simultaneously — then presents you with the best option. One application, multiple lender bids. Free, no obligation. Call or text: 832-605-2616
Texas has strict constitutional homestead protections. You CANNOT do a conventional cash-out refinance within 12 months of a purchase, AND you can only cash out up to 80% LTV (not 95% like some other states). These limits apply statewide by Texas constitution — not just by lender policy.
| Phase | Standard Timeline | Expedited | Notes |
|---|---|---|---|
| Pre-Approval | 1–2 days | Same day possible | Have docs ready |
| Under Contract to Submit | 3–5 days | 24–48 hours | Gather remaining docs |
| Appraisal Ordered to Received | 7–14 days | 5–7 days | Rush appraisal available |
| Underwriting Review | 3–7 business days | 24–48 hrs (priority) | Conditions may add time |
| Conditions to Clear-to-Close | 2–5 days | 1–2 days | Respond to conditions fast |
| Total Typical Close | 21–30 days | 14–17 days | TX norm: 21–30 days |
| Feature | Conventional | FHA | VA |
|---|---|---|---|
| Min Down Payment | 3% | 3.5% (580+) · 10% (500–579) | 0% — No Down |
| Min Credit Score | 620 | 580 (3.5% down) | No official min (620 lender) |
| Upfront MIP/Fee | None | 1.75% of loan | 1.25–3.3% funding fee |
| Monthly MI | PMI if under 20% | Lifelong MIP (usually) | None — no monthly MI |
| MI Cancelable? | Yes — at 20% equity | No (post-2013 loans, <10% down) | N/A — never required |
| Max Loan (TX 2026) | $832,750 | $524,225 most TX counties | No limit (full entitlement) |
| Investment Property | Yes | No | No |
| Second Home | Yes | No | No |
| Property Condition | Standard appraisal | Stricter FHA MPRs | Stricter VA MPRs |
| Seller Concessions | 3–9% | 6% | 4% |
| DTI Maximum | 45–50% | 56.9% (AUS) | 41–50%+ (flexible) |
| Eligible Buyers | Anyone qualifying | Anyone qualifying | Veterans, active, spouses |
| Best For | 620+ credit, 20%+ down, investors | 580–680 credit, minimal down | Veterans — always best if eligible |
| Your Situation | Best Choice | Why |
|---|---|---|
| Veteran / active military | VA Loan | 0% down, no PMI, best rates — if eligible, always consider VA first |
| Credit score 740+, 20% down | Conventional | No PMI, no upfront fee, best overall terms |
| Credit score 580–680, minimal savings | FHA | Lower credit threshold, 3.5% down, more flexible DTI |
| Buying an investment property | Conventional | Only option — FHA/VA require owner occupancy |
| Buying a second home / vacation | Conventional | Only option — FHA/VA require primary residence |
| Need loan over $524K in Texas | Conventional | FHA limit is $524,225 in most TX counties — conventional up to $832,750 |
| Plan to stay 10+ years with low credit | FHA (then refi) | Get in now, build equity, refinance to conventional when credit improves |
| Credit 620–680, strong income | Compare both | Run side-by-side — PMI vs MIP total cost depends on loan size and timeline |
Ethan Morgan specializes in Texas conventional loans — Turkish & English speaking. Get your personalized rate and payment in minutes.