Conventional Loan
The industry standard for home financing.
A traditional mortgage backed by Fannie Mae or Freddie Mac guidelines, offering competitive rates and flexible terms.
What is a Conventional loan?
Conventional loans are conforming mortgages that meet Fannie Mae or Freddie Mac guidelines. They offer flexible term lengths, competitive pricing, and are the most common financing type nationwide.
Designed for
Borrowers with steady income, moderate-to-strong credit, and the ability to make a down payment as low as 3% for qualified buyers.
Why choose it
For most borrowers, conventional loans offer the best balance of cost, flexibility, and long-term flexibility.
Common use cases
- ◆First-time and repeat homebuyers
- ◆Second-home purchases
- ◆Investment property financing
- ◆Refinancing existing mortgages
Built for borrowers who look like this.
First-time buyers
Low down payments are available for qualified buyers.
Move-up buyers
Flexible for primary residences and second homes.
Investors
Available for one- to four-unit investment properties.
Refinance customers
Rate-and-term or cash-out options.
The advantages.
Competitive rates
Typically the lowest pricing available to qualified borrowers.
Down payments from 3%
For eligible first-time homebuyers.
PMI removable
Private mortgage insurance can be dropped at target equity.
Flexible terms
Fixed or adjustable, from 10 to 30 years.
Things to weigh.
Credit-driven pricing
Rates and PMI vary meaningfully by credit score.
Debt-to-income limits
Strict DTI thresholds apply.
PMI on lower down payments
Required when down payment is under 20%.
Loan limits
Conforming caps apply; jumbo may be required above.
What lenders generally look for.
Requirements vary based on lender guidelines and borrower qualifications. The below is educational — not a commitment or offer of credit.
- Down payment
- As low as 3% for qualified first-time buyers
- Credit expectations
- Higher scores unlock better pricing
- Documentation
- Full income, asset, and employment verification
- Occupancy
- Primary, second home, and investment properties
Answers to what borrowers ask most.
What's the minimum down payment?
3% is available for qualified first-time buyers, though many borrowers put down more.
Do I need to pay PMI?
PMI is required with less than 20% down and can be removed at target equity.
What credit score do I need?
Requirements vary by lender and program. Higher scores unlock better rates.
Can I use gift funds?
Yes, in most cases, from an eligible donor.
Are conventional loans faster than government loans?
Often, though speed depends on documentation completeness.
Can I buy an investment property?
Yes, conventional loans are widely available for investment properties.
What loan terms are available?
Fixed and adjustable options from 10 to 30 years.
Can I refinance a conventional loan?
Yes, both rate-and-term and cash-out refinances are available.
Is a conventional loan better than FHA?
It depends on credit, down payment, and long-term goals.
Are conventional loans assumable?
Typically not, unlike FHA and VA loans.
Conventional Loan Buyer Guide
The most common mortgage in America, explained clearly.
Run the numbers.
Educate yourself.
Complementary programs worth exploring.
FHA
A government-insured mortgage offering low down payments and flexible credit thresholds, ideal for first-time buyers.
Explore FHA loan requirementsJumbo
High-balance mortgages for loan amounts that exceed conforming limits, often up to $5M and above.
Explore Jumbo loan requirementsVA
Zero-down financing backed by the Department of Veterans Affairs for eligible service members, veterans, and surviving spouses.
Explore VA loan requirementsUSDA
Government-backed financing with no down payment required for eligible properties in qualifying areas.
Explore USDA loan requirementsAsk about Conventional.
Get contextual answers on eligibility, structure, and how this program compares to others. Powered by the Vabasso AI Mortgage Assistant.
Preview · Vabasso AI integration coming soon