Conventional Loan
The most flexible path to homeownership
A conventional loan is any mortgage not backed by a federal government agency — it follows guidelines set by Fannie Mae and Freddie Mac. With down payments as low as 3%, no mandatory mortgage insurance once you hit 20% equity, and availability for primary homes, second homes, and investment properties, conventional loans are the most versatile product in the market.
3%
Min. down for first-time buyers
$832,750
2026 conforming limit
620+
Typical minimum credit score
Why choose this loan
Benefits of a Conventional Loan
No upfront mortgage insurance premium
Unlike FHA loans, conventional loans have no upfront MIP charge. The FHA's 1.75% upfront fee adds $7,000 to a $400,000 loan — conventional borrowers keep that money.
Cancellable PMI
If your down payment is under 20%, you'll pay PMI — but only until you reach 80% loan-to-value. At that point you can request cancellation, and it terminates automatically at 78% LTV.
Wide range of eligible properties
Conventional loans work for primary residences, vacation/second homes, and 1–4 unit investment properties — flexibility that government-backed loans often don't offer.
Competitive rates for strong borrowers
Borrowers with credit scores above 740 and 20% down typically access the market's most competitive rates through conventional channels — often better than any government-backed alternative.
Eligibility
Do you qualify?
Typical guidelines for a Conventional Loan. Final eligibility is determined during underwriting.
- Minimum credit score of 620; best rates at 740+
- Debt-to-income ratio generally at or below 45%
- Two-year history of stable, verifiable employment and income
- Loan amount at or below the 2026 conforming limit of $832,750 (higher in designated high-cost areas up to $1,249,125)
- Down payment of at least 3% for primary residence (5–10% for second home; 15–25% for investment property)
- Reserves of 2–6 months PITI depending on property type and down payment
Sample scenarios
Illustrative Conventional Loan rates
30-Year Conventional Fixed
6.75%
Illustrative; APR ~6.92%
15-Year Conventional Fixed
6.125%
Illustrative; APR ~6.35%
5/1 ARM Conventional
6.00%
Illustrative start rate
Rates shown are for illustrative purposes only, are not a quote or guarantee, and do not reflect a specific offer. Actual rates depend on credit score, loan amount, loan-to-value, occupancy, and other factors, and change daily. Contact us for a personalized rate quote.
How it works
Your path to approval
- 1
Credit and income review
We pull a soft credit check and review your income documentation to identify the best conventional product and rate tier for your profile.
- 2
Choose your term and structure
We'll present fixed vs. ARM options, lay out the PMI cost curve, and help you decide whether a buy-down makes sense for your situation.
- 3
Pre-approval and home shopping
With your pre-approval letter in hand, you'll shop knowing your exact budget — and sellers will take your offers seriously.
- 4
Underwriting, appraisal, and closing
We manage every step from appraisal order to clear-to-close, keeping you informed at each milestone so nothing slips through the cracks.
Conventional vs. FHA
| Conventional | FHA | |
|---|---|---|
| Min. down payment | 3% | 3.5% |
| Min. credit score | 620 | 580 |
| Mortgage insurance | PMI, cancellable at 80% LTV | MIP: upfront 1.75% + monthly for life |
| Loan limit (2026) | $832,750 baseline | $541,287–$1,249,125 |
| Investment property | Yes (15–25% down) | Primary only |
Frequently asked questions
What is the 2026 conventional conforming loan limit?
The FHFA set the 2026 baseline conforming loan limit at $832,750 for a single-family property — up $26,250 from 2025. In designated high-cost areas the ceiling rises to $1,249,125.
Do I need 20% down for a conventional loan?
No. Eligible first-time buyers can put down as little as 3% through Fannie Mae's HomeReady or Freddie Mac's Home Possible programs. You'll pay PMI until you reach 80% LTV, then it's cancellable.
How does PMI differ from FHA MIP?
PMI on a conventional loan is cancellable once your equity reaches 20% — it automatically terminates at 78% LTV. FHA MIP is typically required for the life of the loan if your down payment was under 10%, making conventional loans cheaper long-term for qualifying borrowers.
Can I use a conventional loan to buy an investment property?
Yes. Conventional loans allow 1–4 unit investment property purchases, typically requiring 15–25% down and qualifying credit. Government-backed FHA, VA, and USDA loans require owner-occupancy.
Ready to explore a Conventional Loan?
Talk to a loan officer today — friendly, no-pressure guidance from real humans.