Austin is a vibrant city renowned for its eclectic live music scene, burgeoning tech industry, and a unique culture that combines innovation with a relaxed, community-focused lifestyle. The Austin housing market is equally dynamic, offering a diverse range of properties from modern downtown condos to spacious suburban homes. While the market has seen some shifts, Austin remains a desirable place to live, making now a great time to explore your options for homeownership.
When you’re looking into conventional home loans in Austin, you’ll likely hear two key terms: conforming and non-conforming. Understanding the distinction is crucial for finding the right mortgage for your financial situation.
A Conventional-Conforming loan is a mortgage that “conforms” to the lending guidelines set by Fannie Mae and Freddie Mac, which are government-sponsored enterprises. These guidelines dictate the maximum loan amount, borrower credit score, and debt-to-income (DTI) ratio. Because these loans are standardized and less risky for lenders, they typically offer more favorable interest rates and terms. In 2025, the conforming loan limit for a single-family home in most of Texas is $806,500.
A Conventional Non-Conforming loan, often referred to as a jumbo loan, is a mortgage that exceeds the conforming loan limits. These loans are used to finance high-value properties that are more expensive than what Fannie Mae and Freddie Mac will purchase. Due to the higher loan amount and increased risk for the lender, non-conforming loans generally have stricter qualification criteria, which may include higher credit score requirements and a larger down payment.
Securing a conventional home loan requires you to meet specific criteria, which demonstrates your financial stability to lenders. While requirements can vary slightly between lenders, here are the general guidelines you can expect for a conventional mortgage in Austin:
Choosing a conventional mortgage offers several benefits for qualified borrowers, making it a compelling option for many Austin homebuyers.
A: Yes! While putting 20% down is ideal to avoid PMI, conventional loans are available with down payments as low as 3%, particularly for first-time homebuyers.
A: The minimum credit score is 620, but having a higher score can help you secure a better interest rate.
A: A government agency does not insure conventional loans and has stricter credit and debt-to-income ratio requirements. FHA loans, on the other hand, are insured by the Federal Housing Administration and are designed for borrowers with lower credit scores or smaller down payments.
A: If the property’s price exceeds the conforming loan limit, you would need to apply for a Conventional Non-Conforming or jumbo loan. These loans have higher limits and different qualifying criteria to accommodate the higher home prices.
Ready to take the next step toward homeownership with VA Loans Texas? Get prequalified in just a few minutes and find out how much you can invest in your future.
Discover your qualification amount in 10 minutes or less with our easy, online pre-qualification process.
Get an instant estimate of how much you can qualify for, streamlining your home-buying journey.
Partner with our experienced, local loan experts who are dedicated to providing personalized and knowledgeable support.
Count on us to guide you smoothly through the process, ensuring your loan closes on time, every time. *Conditions must be met.
Ready to find your perfect place in the “Live Music Capital of the World”? Whether you’re a first-time homebuyer or looking for your next investment property, our team of experienced professionals is here to guide you through the process.
We’ll help you explore all your options and find the conventional loan program that best fits your financial goals. Contact us today at (877) 280-4833 to get pre-approved and take the first step toward homeownership in Austin!