Conventional loans are the most popular mortgage in America, competitive rates, flexible terms, and down payments as low as 3% for qualified borrowers. No government insurance required.
Conventional loans aren't backed by the government, they're underwritten to standards set by Fannie Mae and Freddie Mac. Because of that, they tend to have stricter credit and income requirements, but offer more flexibility and often a lower long-term cost.
For buyers with solid credit and steady income, conventional is usually the best deal. And once you reach 20% equity, you can drop private mortgage insurance, something FHA loans don't allow.
Conventional loans are mortgages that conform to the underwriting standards of Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy loans from lenders in the secondary market. They are the default product for most American homebuyers because they offer the broadest range of pricing, structures, and term options, including 30-year, 25-year, 20-year, 15-year, and 10-year fixed rates, as well as adjustable-rate mortgages with various fixed periods.
Down payments on a conventional loan can start at just 3 percent for first-time buyers using programs like HomeReady or Home Possible, 5 percent for repeat buyers, 10 percent for second homes, and 20 to 25 percent for investment properties. Any down payment under 20 percent typically requires private mortgage insurance (PMI), but unlike FHA mortgage insurance, conventional PMI automatically drops off once you reach 78 percent loan-to-value, and you can often request removal earlier once you hit 80 percent.
Conventional underwriting rewards strong credit. Pricing moves in roughly 20-point credit-score bands, so the difference between a 720 and a 760 FICO can be a quarter-point on the rate, which translates to real money over a 30-year term. Debt-to-income (DTI) limits are usually capped around 45 to 50 percent, and most lenders want at least two months of reserves on a primary, more on second homes and investment property. For California buyers with solid credit and steady W-2 or documented self-employment income, conventional is almost always the starting point.
Conventional loans have stricter standards than FHA/VA, but more flexibility once you qualify.
620+ minimum, with best rates at 740+.
3% minimum for first-time buyers (HomeReady, Home Possible). 5% minimum for repeat buyers on primary residences.
Generally 43%–50% max DTI depending on the program and compensating factors.
Required if you put less than 20% down. PMI rates depend on credit score and down payment, and can be canceled at 20% equity.
Primary residence, second home, or investment property. 1–4 unit homes, condos, and townhomes all eligible.
$806,500 (2026) in standard counties. High-cost California counties allow up to $1,209,750.
3% for first-time buyers using HomeReady or Home Possible. 5% for most other conventional loans on a primary residence.
620 minimum, but rates improve significantly at 680, 720, and 740+.
Private Mortgage Insurance protects the lender if you put less than 20% down. It can be requested for removal at 80% LTV and automatically drops at 78% LTV.
Yes. Investment properties require higher down payments (typically 15–25%) and have slightly higher rates.
Conforming loans meet Fannie Mae/Freddie Mac limits and guidelines. Non-conforming (like jumbo) exceed those limits.
Yes, as long as the condo project is warrantable (approved by Fannie/Freddie). Non-warrantable condos may need different financing.
Free pre-approval. We'll compare conventional with other programs so you choose the best option.