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 most expensive 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

What is a conventional investment property loan?

Accepted Answer

It is standard, competitively priced financing for a non-owner-occupied investment property, the long-term loan you take when your file fits the conventional box. It usually carries a lower rate than a bridge or DSCR loan, in exchange for full documentation.

Question 7

How is it different from a DSCR loan?

Accepted Answer

A conventional loan qualifies on your documented personal income and credit, while a DSCR loan qualifies on the property's rent. Conventional pricing is often lower if you can document your income and you are within the limit on financed properties; DSCR is easier to scale and skips the income docs. We compare both and put you in the one that fits.

Question 8

How much do I need to put down?

Accepted Answer

Plan on roughly 20% to 25% down on an investment-property purchase, with the best pricing at lower leverage and higher credit. Cash-out refinances are typically capped a bit lower than purchases.

Question 9

What credit score do I need?

Accepted Answer

Conventional investment financing generally wants a credit score around 580 or higher, and your rate improves meaningfully as your score and reserves go up. We will tell you up front where your file lands.

Question 10

What can I use it for?

Accepted Answer

Purchases, rate-and-term refinances, and cash-out refinances on non-owner-occupied 1-4 unit investment property. If you will live in the property, that is owner-occupied financing, which we refer to a trusted partner rather than originate here.

Question 11

What documents are required?

Accepted Answer

Because it is fully documented, expect to provide income verification, tax returns, bank statements, and the standard conventional paperwork. If that documentation is a hurdle, our DSCR and bank-statement programs are the no-tax-return alternatives.

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