A flexible starting point for many primary, second-home, and investment purchases.
Conventional Loans
Conventional loans are the most widely used mortgage in the U.S., and it's easy to see why. Not backed by a government agency, they're originated and underwritten to Fannie Mae and Freddie Mac guidelines, giving lenders flexibility to offer competitive rates across a broad range of borrower profiles.
Putting 3% down as a first-time buyer or financing a rental property as a seasoned investor, there's likely a conventional loan structure that fits your situation. They work for primary residences, second homes, and investment properties, making them the most versatile mortgage option on the market.
Eligibility at a Glance
Credit Score
620 minimum; 740+ for best rates
Down Payment
3% (first-time buyers) · 5% (repeat buyers) · 20% avoids PMI
Debt-to-Income
43% maximum; 36% or less preferred
Loan Limit (2026)
Up to $832,750 in most U.S. counties
Property Types
Primary, second home, or investment property
Mortgage Insurance
Required if < 20% down; cancellable at 20% equity
Guidelines reflect general standards. Your individual profile may result in different terms. Contact Jake for a personalized review.
Key Benefits
- ✓No upfront mortgage insurance premium
- ✓PMI cancels automatically at 78% LTV (unlike FHA's lifetime MIP)
- ✓Available for primary homes, vacation properties, and investment properties
- ✓Wide range of terms: 10, 15, 20, and 30-year fixed; ARM options available
- ✓Higher loan limits than FHA in most markets
- ✓Seller concessions up to 3–9% depending on down payment
Things to Consider
- ·Stricter credit requirements than FHA (620 minimum vs. 580 for FHA)
- ·PMI required if you put less than 20% down
- ·Higher rates than VA loans for eligible veterans
- ·Income and assets must be fully documented
Common Questions
What's the difference between conforming and conventional?
All conforming loans are conventional, but not all conventional loans are conforming. Conforming loans meet Fannie Mae/Freddie Mac guidelines (including loan limits). Non-conforming conventional loans, like jumbo loans, exceed those limits.
Can I put less than 20% down on a conventional loan?
Yes. Down payments as low as 3% are available through Fannie Mae HomeReady and Freddie Mac Home Possible programs for qualifying buyers. You'll pay PMI until you reach 20% equity, but it's cancellable, which is a key advantage over FHA.
How does PMI work and when does it go away?
Private Mortgage Insurance (PMI) protects the lender if you default. It's required when your down payment is under 20%. You can request cancellation once you've paid down to 80% LTV, and lenders must automatically cancel it at 78% LTV by law.
Are conventional loans good for investment properties?
Conventional loans are actually one of the few loan types available for investment properties. Expect slightly higher rates (typically 0.5–0.75% above primary residence rates) and a minimum 15–25% down payment.
Is a Conventional Loan Right for You?
A conventional loan is often the best fit if you:
- Have a credit score of 620 or higher (740+ unlocks the best rates)
- Can put down at least 3–5%, or 20% to skip PMI entirely
- Are buying a second home or investment property (FHA and VA don't allow this)
- Want to cancel mortgage insurance once you've built equity
- Have stable, documentable income and a manageable debt load
Ready to explore your options?
Jake will compare conventional options against other loan types to make sure you're getting the best rate and structure for your goals. No guesswork, no pressure.