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What Are the Texas Conventional Loan Limits for 2025?
For 2025, the conforming loan limit for a single‑unit property across Texas is set at $806,500, following the Federal Housing Finance Agency (FHFA) update—a 5.2% increase from 2024. In addition:
- Multi‑unit properties (2–4 units) are permitted higher limits:
Counties with elevated median home values may qualify as high‑cost areas, enabling even higher conforming limits—but most Texas counties remain at the $806,500 baseline.
Conventional Loan Requirements for 2025
Understanding the eligibility criteria is key. Here’s a breakdown:
- Credit Score
- Minimum: 620 (though 740+ helps secure better rates).
- Minimum: 620 (though 740+ helps secure better rates).
- Down Payment
- Primary residence: as low as 3% down.
- Repeat buyers/low‑income earners: typically 5%.
- 2nd homes or investment properties: 10–15%.
- Primary residence: as low as 3% down.
- Private Mortgage Insurance (PMI)
- Required for down payments <20%.
- Cancelable once equity reaches ≥20%.
- Required for down payments <20%.
- Debt‑to‑Income (DTI) Ratio
- Ideal DTI: ≤36%
- Can stretch up to ~49% in some cases.
- Ideal DTI: ≤36%
- Documentation & Appraisal
- Verification: pay stubs, W‑2s, tax returns.
- Appraisals: lenders may require extra inspections for property issues.
- Verification: pay stubs, W‑2s, tax returns.
- Closing Costs & Seller Contributions
- Seller can cover up to 3–9% of purchase price (varies by down payment).
- Seller can cover up to 3–9% of purchase price (varies by down payment).
Conforming vs. Jumbo Loans in Texas
- Loans within the $806,500 limit are conforming—easier to qualify for, backed by Fannie Mae/Freddie Mac, and often have lower rates.
- Loans above that are classified as jumbo—stricter standards, higher down payments, and no GSE backing.
Why These Updates Matter to Texas Buyers
- Higher purchasing power: With the limit bump, more buyers can access conforming financing—even in competitive markets.
- Affordable protection: Since PMI is cancelable, long‑term costs can be reduced as equity builds.
- Jumbo loan thresholds rising: If you need more than $806K, evaluate jumbo options but expect tighter criteria.
Ready to Apply? Next Steps
- Check your credit score. Aim for 620+.
- Get pre‑qualified with a local Texas lender.
- Use your equity: a 20% down payment eliminates PMI—boosting affordability over time.
Explore your financing options—connect with our mortgage experts to find the best conventional loan rate today!
Texas Conventional Loan Requirements Checklist
| Requirement | Minimum Standard |
| Credit Score | 620+ (740+ recommended) |
| Down Payment | 3% (primary), 5% (repeat/home buyers), 10–15% (investment) |
| PMI Required | If down payment <20%, cancellable later |
| DTI Ratio | ≤36%, flexibility up to ~49% |
| Documentation | Pay stubs, W‑2s, tax returns, bank statements |
| Appraisal & Property Condition | Standard, may require additional inspections |
| Closing Costs | Seller contributions ≤9% (depending on down payment) |
Frequently Asked Questions (FAQ)
What’s the conventional loan limit for a two-unit home in Texas?
Approximately $1,032,650 for 2025. Limits increase for 3–4 unit properties as noted above.
Does location within Texas affect conforming loan limits?
While most counties adhere to the $806,500 baseline, high-cost regions could qualify for elevated limits, though few in Texas exceed that.
When can I cancel PMI?
You can request PMI cancellation once your principal-to-loan ratio reaches 80%, based on home value or appraisal.
Read Next: Related Articles
Final Takeaway
With the $806,500 conforming limit and borrower-friendly requirements, conventional loans remain an attractive option for Texas homebuyers in 2025. As you prepare:
- Check your credit and DTI.
- Plan a down payment (~5–20%).
- Get pre‑qualified with a local lender.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
