Conventional

Loans

What are Conventional Loans?

Conventional loans are mortgages not backed by federal programs like FHA or VA. They follow guidelines set by Fannie Mae and Freddie Mac for conforming loans. Because they don’t carry government insurance, they tend to have stricter credit, income, and down-payment requirements—but they also offer some excellent advantages.

Conventional Loan Guidelines

Loan amounts up to $806,500
Credit score affects mortgage interest rate
No mortgage insurance required with 20% or more down payment
Can put down as low as 3% (private mortgage insurance required)
Guidelines differ slightly between Fannie Mae and Freddie Mac

The Benefits of a Conventional Loan

Conventional mortgages offer flexible benefits, including loan amounts up to $806,500, down payments as low as 3%, and the option to use gift funds from family for your down payment or closing costs. Unlike FHA, credit does not need to be pulled for a disclaiming spouse, and with the right qualifications, you may even remove private mortgage insurance (PMI) over time.

Is a Conventional Loan Right for You?

Conventional loans are best for buyers with good to excellent credit who can put down at least 3%—ideally 20% to avoid mortgage insurance. They’re a great fit if you don’t need government-backed programs like FHA or VA and want the flexibility to lower your monthly payments as you build equity.