What Is a Conventional Loan?
A conventional loan is a mortgage that is not backed by a government agency like FHA, VA, or USDA. These loans follow lending guidelines established by Fannie Mae and Freddie Mac.
Conventional loans are commonly used for:
Primary residences
Second homes
Investment properties
New construction homes
Condos and townhomes
Low Down Payment Options
Many buyers are surprised to learn that conventional loans may allow down payments as low as 3% for eligible borrowers through programs like HomeReady® and Home Possible®.
This can help buyers purchase sooner while still benefiting from competitive conventional loan terms.
Conventional Loan Requirements
Requirements can vary depending on the lender and loan program, but conventional loans typically review:
Credit score
Employment history
Stable income
Debt-to-income ratio
Down payment amount
Cash reserves in some cases
Every borrower scenario is different, which is why reviewing your options with a mortgage professional is important.
Get Help Comparing Conventional Loan Options
Choosing the right mortgage is about more than just the rate. We help buyers understand:
Monthly payment options
Cash needed to close
Mortgage insurance differences
Credit impact
Approval strategies
Long-term affordability
Our goal is to help you make a confident and informed decision.
FAQ: Conventional Loans
To help you make informed decisions, we've compiled answers to some of the most commonly asked questions.
What credit score do you need for a conventional loan?
Credit requirements vary, but stronger credit scores may help borrowers qualify for better rates and lower mortgage insurance costs.
Can I buy a home with 3% down?
Do conventional loans require mortgage insurance?
Is a conventional loan better than FHA?
Can conventional loans be used for investment properties?
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