Conventional home loans

Conventional loans built around your buying plan.

Compare down payment, mortgage insurance, monthly payment, and long-term cost before choosing a loan. Get clear guidance on whether conventional financing fits your goals—or whether another option deserves a closer look.

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No pressure to apply. Start with your questions, your numbers, and the decision in front of you.

More than one path Compare conventional financing with FHA, VA, and other eligible options.

More than the rate Review payment, cash required, mortgage insurance, and long-term cost.

A plan you understand Get the reasoning behind the recommendation before moving forward.

Is conventional the right fit?

The answer depends on more than your credit score.

A conventional mortgage is not insured or guaranteed by a federal government agency. It can offer useful flexibility, but the best choice depends on the complete transaction—your credit profile, down payment, income, property, mortgage insurance, and long-term plans.

Worth exploring

A conventional loan may fit when…

You want to compare a flexible, widely used mortgage option against your complete financial picture.

Your credit and overall application support competitive conventional pricing.
You want to evaluate multiple down-payment choices instead of assuming 20% is required.
You want private mortgage insurance that may be eligible for cancellation under applicable requirements.
You are financing an eligible primary residence, second home, or investment property.

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Another loan may deserve a closer look when…

Conventional is not automatically the least expensive or most practical choice for every qualified borrower.

An FHA loan could offer a better overall structure for your credit and down payment.
You have VA eligibility and want to compare the available VA benefits.
You may qualify for a down-payment assistance program with different requirements.
Your income, property, or financial profile needs a more specialized lending program.

The useful question is not simply, “Can I qualify?” It is, “Which option gives me the best combination of payment, cash required, flexibility, and long-term cost?”

How conventional loans work

From your buying plan to a loan you understand.

The process is not about forcing your information into a loan product. It is about reviewing the complete transaction, comparing practical structures, and explaining why one option may fit better than another.

Clarify the goal

Start with the home, comfortable payment, available cash, expected timeline, and how long you may keep the property.

Review the full profile

Income, employment, credit, debts, assets, occupancy, and other details help determine which conventional options may be available.

Evaluate the property

The property type, appraisal, intended use, loan amount, and transaction structure must also meet applicable requirements.

Compare the real cost

Review the rate, payment, cash required, mortgage insurance, closing costs, and long-term tradeoffs before moving forward.

You do not need to choose the loan before asking for help. Start with the decision you are trying to make, and then compare the programs that fit the facts.

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Conventional loan down payments

Twenty percent is an option—not always the starting line.

Some eligible conventional programs allow a down payment as low as 3%. The better question is how each down-payment choice affects your cash reserves, monthly payment, mortgage insurance, and total cost.

Lower down payment

Preserve more cash

A smaller down payment may help you buy sooner or retain funds for reserves, repairs, moving, and other priorities.

Tradeoff: A higher loan amount and private mortgage insurance may increase the monthly cost.

Middle ground

Balance cash and payment

An intermediate down payment may reduce the loan amount and mortgage-insurance cost without using all your available liquidity.

Tradeoff: The ideal balance depends on pricing, reserves, and what that cash needs to accomplish elsewhere.

20% or more

Reduce the financed amount

A larger down payment can lower the loan balance and typically avoids required borrower-paid PMI at closing.

Tradeoff: Lower borrowing costs must be weighed against having less cash available after closing.

Private mortgage insurance

PMI is a cost to evaluate—not automatically a reason to wait.

Private mortgage insurance generally protects the lender when a conventional borrower makes a smaller down payment. Its cost can vary with factors including credit, down payment, loan structure, and property use.

Many conventional borrowers may later request cancellation or receive automatic termination when applicable legal, equity, payment-history, and servicing requirements are met.

The goal is not to make the largest down payment possible. It is to choose a structure that supports the purchase without leaving your broader financial plan exposed.

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Some conventional loan programs may permit down payments as low as 3% for eligible borrowers and properties. This is not a commitment to lend. All loans are subject to credit approval, acceptable documentation, property appraisal, and underwriting. Programs, rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. Equal Housing Lender.

Conventional loan requirements

Lenders evaluate the whole file—not one isolated number.

Credit matters, but conventional loan qualification also depends on your ability to repay, available funds, property, occupancy, and the way the complete transaction fits applicable underwriting requirements.

Credit profile

Lenders review more than the score itself, including payment history, balances, recent credit activity, and the overall depth of the credit file.

Income and employment

Income must be documented, eligible, and reasonably expected to continue. The required analysis varies by employment and income type.

Monthly obligations

Existing debts and the proposed housing payment are compared with qualifying income to evaluate repayment capacity.

Assets and reserves

Funds needed for the down payment, closing costs, and any required reserves must come from acceptable and properly documented sources.

Property and appraisal

The home’s value, condition, type, and eligibility are part of the approval—not simply the borrower’s financial qualifications.

Occupancy and purpose

Requirements can differ for a primary residence, second home, or investment property and for a purchase, refinance, or cash-out transaction.

A stronger application is often built through balance.

One factor may offset risk in another, but no single strength guarantees approval. A complete review shows which adjustments could improve the overall structure.

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Educational information only. Approval and available loan terms depend on a complete application, acceptable documentation, property review, underwriting, licensing, and current program requirements. This is not a commitment to lend.

Conventional loan options

One category. Several ways to finance a property.

Conventional financing can support different properties and goals. The requirements and available structure change with occupancy, transaction type, loan size, and the complete application.

Important: A program that works for a primary home may have different down-payment, reserve, pricing, or qualification requirements for a second home or rental property.

How the property will be used

Primary residence A home you intend to occupy as your principal residence.

Second home An eligible property used personally but not as your primary residence.

Investment property An eligible non-owner-occupied property held for rental income or investment.

What you want the loan to accomplish

Purchase Finance an eligible home while comparing down payment, payment, and cash-to-close choices.

Rate-and-term refinance Review whether changing the rate, term, or loan structure produces a meaningful benefit.

Cash-out refinance Evaluate access to available equity alongside the resulting payment, costs, and long-term impact.

How the loan may be structured

Conforming Meets applicable agency eligibility and loan-limit requirements.

High-balance May be available in designated higher-cost areas under applicable limits and requirements.

Jumbo Nonconforming financing for loan amounts or scenarios outside standard conforming limits.

Program availability, property eligibility, occupancy requirements, loan limits, pricing, and underwriting standards vary. All loans are subject to credit approval, acceptable documentation, property appraisal, and current program requirements. This is not a commitment to lend.

Conventional loan vs. FHA loan

Compare the complete structure—not just the minimum down payment.

Both programs can help eligible borrowers purchase a home. The better fit depends on credit, down payment, mortgage insurance, property use, loan limits, and the total cost over the time you expect to keep the loan.

Compare

Conventional loan

FHA loan

Loan backing

Not insured or guaranteed by a federal government agency.

Insured by the Federal Housing Administration and originated by approved lenders.

Down payment

Some eligible programs may allow as little as 3% down.

Eligible borrowers may qualify with as little as 3.5% down.

Credit profile

Pricing and eligibility can be more sensitive to credit score and the complete risk profile.

May provide more flexibility for some borrowers with lower credit scores or limited down payment.

Mortgage insurance

Private mortgage insurance may apply and may later be cancellable when applicable requirements are met.

Uses FHA mortgage insurance; its cost and duration depend on the loan structure and applicable FHA rules.

Property use

May finance eligible primary residences, second homes, and investment properties.

Generally intended for an eligible property the borrower will occupy as a primary residence.

Loan limits

Conforming limits apply, with higher limits available in designated higher-cost areas.

FHA loan limits vary by county and property type.

Best fit

Can be compelling when credit, pricing, mortgage insurance, and the property align well.

Can be compelling when FHA’s qualification flexibility creates a better overall path.

The right answer can change from borrower to borrower.

A side-by-side estimate should compare payment, cash required, mortgage insurance, closing costs, and the expected time in the loan.

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Down-payment options and program availability depend on borrower eligibility, property eligibility, credit approval, acceptable documentation, appraisal, underwriting, and current guidelines. This is not a commitment to lend. Programs, rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. Equal Housing Lender.

Conventional loan FAQs

Questions worth answering before you choose a loan.

These are useful general answers, but your available options depend on the complete application, property, transaction, and current underwriting requirements.

Do I need 20% down for a conventional loan?

No. Some conventional programs may permit down payments as low as 3% for eligible borrowers and properties. A down payment below 20% may require private mortgage insurance, so the right amount should be evaluated alongside your payment, cash reserves, and total cost.

What credit score is needed for a conventional loan?

Requirements vary by program, underwriting method, lender, and the complete risk profile. Credit score affects eligibility and pricing, but lenders also evaluate income, debts, assets, occupancy, property, and other application details.

Can private mortgage insurance be removed?

Many conventional borrowers may request PMI cancellation or receive automatic termination when applicable legal, equity, payment-history, seasoning, property-value, and servicing requirements are met. Your servicer can explain the requirements for your specific loan.

Are conventional loans only for first-time homebuyers?

No. Conventional loans may be used by eligible first-time and repeat buyers. Certain low-down-payment programs may have additional first-time-buyer, income, occupancy, or homeownership-education requirements.

Can I use a conventional loan for an investment property?

Yes, conventional financing may be available for eligible investment properties. Down payment, reserves, pricing, rental-income treatment, and property requirements generally differ from those for a primary residence.

Can gift funds be used for the down payment or closing costs?

Eligible gift funds may be permitted for certain transactions when the donor, documentation, transfer, borrower contribution, occupancy, and reserve requirements are satisfied. The acceptable structure depends on the specific program and transaction.

Is an appraisal always required?

A property valuation and collateral review are generally part of the process. Some eligible transactions may receive an appraisal waiver or alternative valuation option through the applicable underwriting system, but this cannot be assumed in advance.

What is the difference between conventional and conforming?

Conventional describes loans that are not insured or guaranteed by FHA, VA, or USDA. Conforming describes conventional loans structured to meet applicable Fannie Mae or Freddie Mac eligibility and loan-limit requirements. A conventional loan can also be nonconforming.

Educational information only. This is not a commitment to lend. Approval and available loan terms depend on credit approval, acceptable documentation, property appraisal or permitted alternative, underwriting, licensing, and current program requirements. Programs, rates, terms, and conditions are subject to change without notice. Equal Housing Lender.

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Whether you are gathering information, ready to compare real numbers, or prepared to begin an application, choose the starting point that fits you.

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