How much down payment do I need for a conventional mortgage?

Conventional loans require as little as 3% down for first-time buyers through Conventional 97 or HomeReady programs. Repeat buyers typically need 5% minimum. Putting 20% down eliminates private mortgage insurance (PMI), A conventional loan with less than 20% down usually has monthly mortgage insurance until it can be removed.

What is the conventional loan limit in Austin TX for 2026?

The 2026 conforming loan limit for Travis County (Austin) is $832,750 for a single-family home. This means you can finance a home up to that amount with a conventional loan. Homes priced above this limit require a jumbo loan, which has different qualification requirements.

Can I use a conventional loan for an investment property in Austin?

Yes. Conventional loans are one of the few loan types that allow investment property financing. Expect to put 15-25% down for investment properties, and rates are typically 0.5-0.75% higher than primary residence rates. Rental income can be used to help qualify.

Conventional loans • Austin & Texas

Conventional Loans in Austin, Texas

Can I buy with less than 20% down and drop mortgage insurance later?

If your credit is in decent shape, this is usually the first file I open. I look at the down payment, whether private mortgage insurance can come off, and whether Fannie Mae or Freddie Mac actually fits. The 2026 conforming limit in Travis, Williamson, and Hays counties is $832,750. I compare lenders after that, not before.

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By Adam Styer, Senior Loan Officer • NMLS #513013 • Company NMLS #2072896

Down Payment

3% to 5% Down

HomeReady & Conventional 97 available

Conforming Limit

$832,750

2026 Travis County baseline limit

Mortgage Insurance

Cancels at 20%

No permanent life-of-loan MIP fees

The File

Conditions Up Front

The conditions list goes out up front

What should I know about this option?

What Is a Conventional Loan in Austin, Texas?

A conventional loan is a residential mortgage backed by Fannie Mae or Freddie Mac rather than guaranteed by a government agency like the FHA or VA. In Austin and Travis County, conventional loans cover purchase amounts up to the 2026 conforming limit of $832,750. Private mortgage insurance (PMI) can cancel once you reach 20% equity. That is the reason I compare it with FHA, where the insurance often stays.

I can look at 3% down for many first-time buyers (Conventional 97 or HomeReady) and about 5% for repeat buyers. A bank that starts the conversation at 20% down is quoting a preference, not the only guideline.

Common Situations

Who Conventional Financing Is Built For

These are the situations where I start with conventional instead of FHA or jumbo.

First-Time Homebuyers

Put as little as 3% down with Conventional 97 or Fannie Mae HomeReady. You keep more cash, and PMI stays on the payment until there is enough equity to remove it.

Move-Up Buyers (20% Down)

If you can put 20% down from the sale of another house, monthly PMI is not part of the payment. I still compare the cash you would rather keep.

High Credit Profiles (740+)

Conventional loan pricing heavily rewards credit scores of 740 and higher with minimal Loan-Level Price Adjustments (LLPAs) and the cheapest monthly PMI rates.

Second Homes & Rentals

Conventional financing allows single-family vacation homes in the Texas Hill Country and 1-to-4 unit rental investment properties with up to 10 financed properties per borrower.

Program Options & Process

Simple Options & 3-Step Process

I match the term to how long you expect to keep the house. Then my team and I take the file from there.

30-Year Fixed Conventional

Principal and interest stay the same for 30 years. These loans do not have a prepayment penalty.

Best for: Maximum monthly cash-flow stability

15-Year Fixed Conventional

Significantly discounted interest rates compared to 30-year terms. Build equity twice as fast and save tens of thousands in cumulative interest.

Best for: Accelerated equity & interest savings

Conventional 97 (3% Down)

Specialized first-time homebuyer program requiring just 3% down. Private mortgage insurance cancels once you reach 20% equity.

Best for: First-time buyers keeping cash reserves

Pre-qualification letter

I review credit, income, and assets and tell you what payment the file supports. The first look is not a hard credit pull.

Wholesale Lender Match

I compare your file with the wholesale lenders I use and show you the rate and the fees for your credit tier. I show you the rate and the fees for your credit tier. I do not promise a rate in a paragraph.

Conditions Up Front

My team and I send the conditions list up front. Appraisal and title still have to come in. How long that takes depends on the file.

Illustrative Scenario

Conventional in Action: A Clear Scenario

A look at removable private mortgage insurance next to a government loan.

Illustrative Case • Move-Up Purchase Cedar Park, Texas

Cedar Park Move-Up Buyer — 10% Down with Removable PMI

The Scenario: A growing family purchasing a $550,000 home in Cedar Park. They had a 745 credit score and wanted to put 10% down ($55,000) to keep liquid emergency reserves intact.

The FHA vs. Conventional Choice: A retail bank recommended an FHA loan due to slightly looser underwriting. However, FHA requires an upfront 1.75% mortgage insurance fee ($8,662 added to loan balance) plus permanent monthly MIP of $226/month that never cancels.

How I looked at it: I placed the file with a conventional lender. With a 745 FICO score, monthly PMI was only $98/month (saving $128/month compared to FHA) and will automatically cancel in 4 years once the loan balance reaches 80% LTV. Approved.

Disclosure: Illustrative scenario based on composite borrower profile. Actual interest rates, PMI pricing, and terms depend on credit score, loan-to-value, and lender guidelines.

Supporting Research & Worksheets

Explore the Details

In-depth underwriting guidelines, loan limit tables, and comparative analyses in our specialist resources.

Conventional vs. FHA Loan Comparison Guide Read Guide →

Compare credit requirements, removable PMI vs. permanent MIP, and total 5-year borrowing costs side by side.

Travis County Conforming Baseline Limit ($832,750) Explore Jumbo Options →

How the 2026 FHFA conforming baseline applies in Austin, and what changes when your purchase amount goes jumbo.

Texas Closing Costs & Fee Breakdown View Worksheet →

Understand lender origination, Texas title policy rates, appraisal costs, and property tax escrow requirements.

Monthly Mortgage Payment & PMI Calculator Calculate Payment →

Model principal, interest, Texas property taxes, and tiered PMI costs based on your specific down payment.

Conventional Loan Requirements →

Clear Answers

Frequently Asked Questions

Straightforward answers to the questions Austin conventional buyers ask most.

What credit score do I need for a conventional loan in Austin?

Most conventional loan programs require a minimum credit score of 620. Borrowers with scores of 740 or higher usually see better pricing and a smaller PMI factor. Below that, the loan can still work. The payment is just different.

How much down payment does a conventional loan require?

First-time homebuyers can put as little as 3% down through Fannie Mae HomeReady or Conventional 97. Repeat buyers typically put 5% to 20% down. Putting 20% down eliminates monthly PMI completely.

When is private mortgage insurance (PMI) removed?

Unlike FHA loans where mortgage insurance lasts for the life of the loan, conventional PMI automatically cancels once your principal balance reaches 78% of the original home value, or you can request cancellation at 80% equity based on home appreciation.

What is the conventional conforming loan limit in Austin for 2026?

For 2026, the Federal Housing Finance Agency (FHFA) baseline conforming limit for Travis, Williamson, and Hays counties is $832,750 for a single-family home. Purchase amounts exceeding $832,750 are classified as jumbo loans.

Are conventional loans better than FHA loans?

For borrowers with credit scores around 680 or higher and at least 5% down, conventional is often less expensive over time because PMI can be cancelled and there is no upfront FHA funding fee. FHA is best suited for borrowers with lower credit scores or higher debt-to-income ratios.

What sets the closing timeline on a conventional loan in Austin?

I will tell you if the appraisal, the condo project, or a condition is still open. How long closing takes depends on those pieces.

How I work • I compare lenders before I recommend one • Pricing without a retail bank markup • Clear communication and the conditions list up front • You work with me and my team

Scenario review

Want me to look at a conventional file?

Tell me the price, the timeline, and what you are trying to do. I will tell you whether this loan fits. This is a file review, not a credit pull.

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