Conventional Loans
Conventional loans are the most common type of mortgage in the U.S. They're offered by private lenders and follow guidelines set by Fannie Mae and Freddie Mac.
In this guide
Down payment & PMI
Many conventional programs allow as little as 3% down for first-time buyers. If you put down less than 20%, you'll usually pay private mortgage insurance (PMI). The good news: PMI can be removed once you reach roughly 20% equity, unlike FHA mortgage insurance which often lasts the life of the loan.
Credit & DTI
Conventional loans typically reward higher credit scores with lower rates and cheaper PMI. A score in the mid-700s or above generally earns the best pricing. Lenders also look closely at your debt-to-income ratio.
Conforming loan limits
“Conforming” loans fall under annual limits set by the Federal Housing Finance Agency. Loans above that limit are called jumbo loans and have stricter requirements. Limits are higher in high-cost areas.
Related Guides
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- VA Loan Booklet Zero-down benefits, the funding fee, and eligibility — explained.
- FHA Loan Booklet 3.5% down, credit flexibility, and how mortgage insurance works.
- Conventional Loan Booklet Low-down options, PMI, and how to get the best pricing.
- Refinancing Booklet Rate-and-term vs. cash-out, and finding your break-even point.
- First-Time Buyer Booklet A step-by-step roadmap from budgeting to closing day.
- Jumbo Loan Booklet High-balance loans: requirements, rates, and when they make sense.
- DSCR Investor Loan Booklet Qualify on rental income, not personal W-2s — built for investors.
- Reverse Mortgage Booklet How HECMs work, eligibility, and what homeowners 62+ should know.
- HELOC & Home Equity Booklet Compare HELOCs and home equity loans: structure, rates, and use cases.
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