What is a Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. These loans typically conform to guidelines set by Fannie Mae and Freddie Mac, offering competitive rates and flexible terms for borrowers with good credit.
Key Benefits
- Low Down Payment Options: As little as 3% for first-time buyers
- PMI Removal: Private mortgage insurance can be removed at 20% equity
- Flexible Property Types: Primary, secondary, and investment properties
- Competitive Rates: Often the best rates for qualified borrowers
- Various Term Options: 10, 15, 20, 25, or 30-year terms available
Types of Conventional Loans
Conforming Loans
Meet Fannie Mae/Freddie Mac guidelines with loan amounts up to $766,550 (2024 limit for most areas).
Non-Conforming Loans
For borrowers who don't meet standard guidelines or need larger loan amounts.
Conventional Loan Requirements
Minimum Credit Score
620+ (best rates at 740+)
Down Payment
3% - 20%+
Debt-to-Income Ratio
Up to 45% (50% with strong factors)
Property Types
Primary, second home, investment
