The conventional loan: the flexible standard.
Not backed by a government agency, conventional loans follow guidelines set by Fannie Mae and Freddie Mac — and reward strong credit with more flexibility on property type, use, and how you get rid of mortgage insurance.
Is a conventional loan right for you?
Conventional loans work well across the widest range of buyers. Here's when they tend to be the better fit.
This is a strong fit if
- Your credit score is around 620 or higher
- You want the option to buy a second home or investment property
- You'd like mortgage insurance you can eventually cancel, not one that lasts the life of the loan
- You have at least 3–5% saved, or more for the best rates
Worth a second look if
- Your credit history has recent significant issues
- You have little to no down payment saved and don't qualify for a low-down-payment program
- You're buying in a USDA-eligible area with a limited budget and no down payment saved
How the conventional loan grows
Conventional underwriting leans more heavily on your credit and finances since there's no government guarantee behind it.
Credit score
Typically 620 and up, with the best rates reserved for scores in the 740+ range — credit does more work here than in government-backed programs.
Down payment
As low as 3% for qualified first-time buyers on a conforming loan, though 5–20% is common.
Private mortgage insurance (PMI)
Required if you put down less than 20%, but it can be cancelled once you reach 20% equity — unlike FHA's MIP.
Loan limits
Conforming loans follow an annual limit set by the Federal Housing Finance Agency; anything above it becomes a jumbo loan with its own guidelines.
The numbers, at a glance
How it stacks up against other paths
Common questions
Is a conventional loan harder to qualify for?
Not necessarily harder, but it leans more on credit score and financial strength since there's no government agency insuring part of the loan.
Can I really get rid of PMI?
Yes — once your loan balance drops to 80% of the home's value (through payments or appreciation), you can typically request PMI be removed.
What's the difference between conforming and jumbo?
Conforming loans fall within Fannie Mae and Freddie Mac's annual limit. Anything above that limit is a jumbo loan, which usually requires a stronger credit profile and larger down payment.
Can I use a conventional loan for a rental property?
Yes — conventional loans are one of the few options that allow financing for second homes and investment properties, typically with a larger down payment.
Let's find out what you actually qualify for
Every buyer's situation is different. Send us a few details and a HomeRoots Group agent will walk you through your real numbers — no pressure, no obligation.
This page is for general information and isn’t a loan offer or commitment. Rates, terms, and eligibility are set by lenders and program guidelines and can change.