Conventional loans are the most common type of mortgage in the United States. They are not insured or guaranteed by the federal government, so lenders set their own criteria for credit, income, and down payment.

Typical Down Payment Ranges

In Texas, borrowers can usually put down as little as 3% of the home’s price if they have a strong credit profile and are willing to pay private mortgage insurance (PMI). More commonly, lenders see down payments of 5% to 20%.

Why Lenders Set Minimums

The down payment protects the lender by reducing the loan‑to‑value (LTV) ratio. A lower LTV means the borrower has more equity in the property, which lowers the lender’s risk if the market declines or the borrower defaults. When the down payment is under 20%, lenders usually require PMI to further mitigate that risk.

Impact of Texas Community‑Property Laws

Texas is a community‑property state, meaning most assets and debts acquired during marriage are owned jointly. Lenders therefore typically evaluate the combined income, credit, and assets of both spouses, even if only one spouse will be on the mortgage. This can affect the amount of down payment a household can comfortably afford.

Avoiding Private Mortgage Insurance

• Save for a 20% down payment to eliminate PMI.
• Consider a piggy‑back loan (e.g., 80/10/10) if you have a solid credit score and can qualify for a second mortgage.
• Look for lender‑offered programs that waive PMI with a slightly lower down payment if you meet certain criteria.

State Programs That Can Help

Texas offers several homebuyer assistance programs, such as the Texas First Time Homebuyer (TFTH) program and Texas Mortgage Credit Certificate (MCC) program. These can provide down‑payment grants or tax credits that effectively reduce the amount you need to bring to closing.

This article provides general information and should not be taken as personalized financial advice. Always consult a qualified mortgage professional for your specific situation.