Conventional Loans
A conventional loan isn't backed by a government agency — it follows guidelines set by Fannie Mae or Freddie Mac. It's often the default starting point for buyers with solid credit and steady income.
Who this may fit
- Buyers with good-to-strong credit who want the most flexibility in property types
- Buyers who can put down at least a small down payment and want mortgage insurance that eventually goes away
- Move-up buyers and buyers purchasing a second home or investment property
Typical advantages
- Available with lower down payments than many people assume
- Private mortgage insurance (PMI) can typically be removed once you reach enough equity — unlike some government-backed programs
- Usable on primary residences, second homes, and investment properties
- No upfront guarantee/funding fee added to the loan the way some government programs have
Potential drawbacks
- Credit and debt-to-income requirements are generally less flexible than FHA
- Larger down payments are usually needed to avoid PMI entirely
- Pricing and PMI cost are more sensitive to credit score than some other programs
Qualification considerations
- Credit score minimums vary by lender and loan scenario — this changes, so we'll check what applies to your file specifically rather than relying on a rule of thumb
- Debt-to-income ratio is a major factor alongside credit and reserves
- Down payment can be smaller than people expect, especially for first-time buyers
Down payment
Conventional down payments can start well below 20% for qualified buyers, though the exact minimum depends on the specific program and your situation.
Mortgage insurance
If you put down less than 20%, you'll typically carry private mortgage insurance (PMI). Conventional PMI is generally removable once you build enough equity — a real advantage over some other loan types.
Property considerations
Conventional loans are the most flexible when it comes to property type — primary residences, second homes, condos (with approval), and investment properties can all qualify.
When another program might make more sense
If your credit is still being rebuilt, or you have very limited cash for a down payment, FHA or a down payment assistance program might make more sense as a starting point.
Loan guidelines, limits, and mortgage insurance requirements change and vary by lender, credit profile, and property. Nothing on this page is an offer of credit or a guarantee of eligibility — it's a starting point for a real conversation about your specific situation.
Conventional FAQ
Do I need 20% down for a conventional loan?
No — that's one of the most common myths. Many buyers qualify with significantly less down. We can look at what applies to your specific numbers.
Can PMI be removed later?
Generally yes, once you reach a certain equity threshold, conventional PMI can typically be removed — one of the differences from some government-backed loan types.
Is conventional harder to qualify for than FHA?
It depends on your credit and financial picture. Conventional guidelines can be less flexible on credit and debt-to-income in some cases, but often come with better long-term cost if your profile is strong.
Want to know if Conventional actually fits your numbers?
Let's look at your credit, cash, and income together and talk through real options.