What is a conventional loan?
A conventional mortgage is not insured by a government agency like FHA or VA. Instead, it typically follows guidelines set by Fannie Mae or Freddie Mac (often called “conforming” loans when they meet loan limits and other rules).
Who conventional loans work well for
- Buyers with stronger credit and stable income.
- Buyers who want to avoid some of the extra costs that can come with government-backed loans.
- Buyers purchasing a primary home, second home, or investment property (program rules vary).
Typical requirements (varies by borrower)
- Credit score benchmarks (often starting around 620 for many programs—your lender confirms).
- Down payment options for qualified first-time buyers as low as 3% on some programs.
- Private mortgage insurance (PMI) may apply when you put down less than 20%—and can often be removed later as you build equity.
- Gift funds may be allowed for part of the down payment (guidelines apply).
Conforming vs. jumbo (non-conforming)
Conforming loans meet the loan limits FHFA sets each year for your county. Jumbo (non-conforming) loans are used when the loan amount exceeds the conforming limit for your area.
Get a clear comparison
Conventional loans may not always be “harder”— it may be the best fit for your situation depending on your down payment, property type, and monthly payment goals.
Contact us to see what you qualify for
All loans are subject to credit and underwriting approval. Program guidelines, rates, and limits change. This page is for general education and is not a commitment to lend. Ask a licensed loan officer for details that apply to you.