Conventional Loans
The gold standard for qualified buyers.
The most common type of mortgage, backed by Fannie Mae or Freddie Mac rather than a government agency — a strong fit for borrowers with solid credit and stable, documentable income.
Program Highlights
- Down payments as low as 3% for qualified first-time buyers (5% for repeat buyers on most programs)
- Private mortgage insurance (PMI) can be removed once you reach 20% equity — unlike FHA's lifetime MI
- 2025 conforming loan limit is $806,500 in most areas (higher in designated high-cost counties)
- Fixed-rate terms of 15, 20, or 30 years, plus adjustable-rate options (e.g., 5/1, 7/1 ARM)
- Available for primary residence, second home, and investment property
- Strong pricing for higher credit scores and lower loan-to-value ratios
- No upfront mortgage insurance premium (unlike FHA's 1.75% upfront fee)
Best For
- Buyers and homeowners with good-to-excellent credit
- Borrowers with stable, documentable income
- Anyone who wants PMI that can be removed at 20% equity
What You'll Need to Qualify
- Typically 620+ credit (best pricing at 740+)
- As low as 3% down for qualified first-time buyers
- Debt-to-income generally under 45–50%
- Documented income, assets, and down payment
Guidelines vary by lender and borrower profile. All loans subject to underwriting approval. Not a commitment to lend.
Good to Know
conventional loans reward strong credit and lower leverage with better pricing more than any other program — even a modest credit score or down payment improvement can meaningfully lower your rate.
Common Questions
How much down payment do I really need?
As low as 3% for qualified first-time buyers; 5% is common for repeat buyers, though 20% avoids PMI entirely.
When does PMI go away?
Once you reach 20% equity through payments or appreciation, you can request PMI removal (it's automatically removed at 22% equity under federal law).
Is conventional better than FHA?
It depends on your credit and down payment — conventional usually wins for stronger-credit borrowers since PMI is removable and there's no upfront MI fee.