Question 1

Does a Waco or McLennan County purchase price ever push a conventional file toward jumbo territory?

Accepted Answer

Not in this metro, in almost every case. The city of Waco's mid-tier home value was $200,115 in June 2026, and even the metro's highest-cost tracked submarket, Crawford, ran $514,825. Most of the named submarkets sit well under $350,000: Hewitt $303,111, West $305,449, Robinson $308,323, Moody $328,584, Lorena $347,891. A conventional buy-and-hold here is a standard-limit file in the overwhelming majority of purchases; the number that actually changes your underwriting is McLennan County's tax stack, not loan size.

Question 2

What does the McLennan County tax bill actually run on an investor purchase, with no homestead exemption?

Accepted Answer

About 2.2484 per $100 of value inside the city of Waco. That is county 0.334805, plus McLennan Community College 0.131974, plus City of Waco 0.755000, plus Waco ISD 1.026600, all 2025 adopted rates with no homestead exemption or cap available to a non-owner-occupied purchase. City limits are not the same as school district boundaries in this county, so confirm which ISD actually serves the parcel on the McLennan CAD account before you finalize the escrow line on a conventional file. China Spring, unincorporated with no city rate, runs the lowest stack in the metro at 1.4487.

Question 3

Is the McLennan County tax rate likely to stay where it is for the hold period?

Accepted Answer

Plan for it to rise, not hold flat. The county's 2025 adopted rate was 0.334805 per $100, and on 2026-07-31 McLennan County proposed 0.394805 for tax year 2026, a roughly 17.9% increase (0.06 divided by 0.334805), citing sheriff and jail costs and salary competitiveness. That is a proposal, not yet an adopted rate, so confirm the final 2026 number on the CAD table before you close, but a five-year conventional hold pro forma in this county should not assume the tax line stays flat.

Question 4

How should insurance carry get underwritten on a conventional loan here, given the year-to-year swings?

Accepted Answer

Underwrite to a bad hail year, not the most recent quiet one. McLennan County paid $58.2 million in homeowners losses across 47,827 policies in 2025, or $1,216 per policy, with wind and hail at 53% of that total. In 2023, the same dataset shows $120.6 million in paid losses, or $2,575 per policy, with wind and hail alone at $1,986 per policy. That is more than double the per-policy loss level in a single bad year. Central Texas hail, not coastal wind, is the driver: McLennan County is roughly 180 miles from the Gulf and outside the state wind pool's eligibility footprint, so this is a roof-and-deductible conversation, not a hurricane one.

Question 5

Does conventional or DSCR make more sense on a Waco rental near Baylor?

Accepted Answer

Either can work, but the two programs answer different risks. A DSCR loan qualifies on the property's rent, which in the city of Waco runs about an 8.2% gross yield ($1,369 monthly ZORI rent on a $200,115 mid-tier value, June 2026). A conventional loan qualifies on your documented income instead, which matters if the address is close enough to Baylor's College and University Neighborhoods overlay that a planned rehab could cross the 30% to 50% appraised-value threshold that triggers overlay requirements like one parking space per bedroom. That threshold is a rehab-cost question, not a purchase-financing one, but it is worth flagging before you underwrite the deal either way. Send us the address and we will run both programs.

Question 6

Does $40,000 down cover a purchase at Waco's $200,115 mid-tier value?

Accepted Answer

At 80% LTV it does, and credit starts at 580. On a $200,000 Waco purchase that is up to $160,000 from us and $40,000 from you (200,000 x 80% = 160,000), which sits close to a real entry basis here since the city's mid-tier home value was $200,115 in June 2026. This is a fully documented program on non-owner-occupied property, for a purchase or a refinance, on a 30-year fixed or an ARM. Subject to underwriting.

Question 7

Waco rentals run about an 8.2% gross yield. Do I still have to document income?

Accepted Answer

On this program, yes. Income is documented, and that is the trade. Conventional is often the lowest-cost option for a long-term Waco hold, and the price of that is a full income file rather than a property-level one. If your returns are written to minimize taxable income, the DSCR route qualifies off the rent instead, which in the city of Waco runs about an 8.2% gross yield. Send us the address and we will price both. Subject to underwriting.

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