Conventional Loans

A Fannie Mae and Freddie Mac mortgage. Down payments start at 3% on some programs. Twenty percent down means no private mortgage insurance. With less down, PMI stays until about 20% equity, and then it comes off.

Check eligibility with a lender
Couple reviewing conventional mortgage options at a kitchen table

Conventional Eligibility Requirements

You need to meet all six. Down payments start at 3% on some programs. Twenty percent down means no PMI.

Down payment from 3%

Some programs allow 3% down, including first-time buyer loans and loans under an income limit. A standard conventional loan is often 5% down. Twenty percent down avoids private mortgage insurance (PMI). Gift funds can cover the down payment on a primary home when the lender allows.

Down payment strategies

Credit score 620+ typical

Most conventional lenders look for 620 or higher. Scores of 740+ usually get the best rates and lowest PMI. Lower scores may still qualify with a larger down payment or higher mortgage insurance cost.

Debt-to-income within lender limits

Total DTI is often capped around 43% to 50%, depending on automated underwriting and compensating factors. Strong reserves, credit, and down payment can offset a higher ratio.

Open the debt-to-income calculator

Eligible property and occupancy

Conventional loans cover primary residences, second homes, and investment properties. Owner-occupied 1–4 unit homes, condos in approved projects, and some manufactured homes qualify. Second homes and rentals have stricter down payment and reserve rules.

Loan amount within conforming limits

The 2026 conforming baseline is $832,750 for a one-unit home in most counties, up to $1,249,125 in high-cost areas. Loans above the local limit are jumbo mortgages with different underwriting.

See jumbo loans

Verified income and assets

Lenders typically verify two years of employment or self-employment income, plus the cash for the down payment and reserves. W-2s, tax returns, and bank statements are the usual documents.

Connect with a Licensed Lender

Private mortgage insurance (PMI)

PMI is the monthly charge when you put less than 20% down. It comes off. FHA mortgage insurance often stays for the life of the loan.

  • Under 20% down: monthly PMI until you build enough equity
  • 20% down at closing: no PMI
  • You can request cancellation at 80% of the original value when payments are current
  • Servicers must cancel PMI at 78% of the original value on a primary residence
  • The cost depends on credit score, down payment, and loan size
  • An appraisal can support an earlier request when the home has gained value

Conventional vs FHA

FHA fits when credit is the constraint: 3.5% down and a score that can start near 580. Conventional often costs less when your score is around 740 or higher. PMI is priced from that score, and it comes off around 20% equity. FHA mortgage insurance lasts the life of the loan if you put less than 10% down.

Feature
Conventional620+ credit, 3%+ down
FHA580+ credit, 3.5% down
Down payment
3%+ (5% is common; 20% avoids PMI)
3.5% min (580+ credit)
Credit score
620+ typically; 740+ for best rates
580+ (500–579 with 10% down)
DTI
Typically 43–50%
Guidelines 31/43; automated files can go higher
Mortgage insurance
PMI if under 20% down; removable
MIP for life if under 10% down; 11 years if 10%+
Loan limits
Conforming $832,750; jumbo above
County limits; 2026 floor $541,287
Gift funds
Allowed; some restrictions
Full down payment allowed
Seller concessions
3–6% by down payment
Up to 6%
Property use
Primary, second home, or investment
Primary residence only
Compare conventional rates
Check FHA eligibility

Terms, jumbo, and live rates

Most conventional purchases use a fixed term. Above the conforming limit, jumbo underwriting applies.

Couple meeting with a mortgage broker outside a home

30-year fixed

Most common conventional term

Lock a payment for 30 years. The national 30-year survey average is 7.11%.

Key Details

  • Stable principal and interest
  • Works for primary, second, and investment homes
  • Compare offers in the live rate table
See 30-year fixed rates
Starter home with sold sign in the yard

Compare live rates

Conventional, FHA, VA, USDA

Filter by credit, purchase price, and loan type to see side-by-side lender offers.

Key Details

  • Updated lender tables
  • 30-year, 15-year, and ARM
  • Personalized when you adjust filters
Compare mortgage rates
Couple in front of a higher-priced home

Jumbo loans

Above conforming limits

When the loan exceeds $832,750 in most counties (higher in designated high-cost areas), conventional jumbo rules apply.

Key Details

  • Stricter credit and reserves
  • Often 10–20% down
  • Portfolio lender pricing
See jumbo loans
Couple standing in front of a home

Government programs

FHA, VA, and USDA

If conventional cash or credit is the hurdle, a government-backed loan may be the better first step.

Key Details

  • FHA: 3.5% down, flexible credit
  • VA: $0 down for eligible veterans
  • USDA: $0 down in eligible areas
Compare all mortgage programs

Conventional 30-year fixed rate average

The figure below is a national survey average for 30-year fixed-rate conforming mortgages, the benchmark most conventional purchase loans follow. It is not a personalized quote: your rate depends on your credit, down payment, loan amount, property type, and the lender you choose.

Conventional loans are sold to Fannie Mae or Freddie Mac when they meet conforming guidelines. Compare live lender offers on our rates page, or see 30-year, 15-year, and ARM overviews for term tradeoffs.

7.11% APR

Last announced November 12, 2026

Compare conventional rates

Source: MORTGAGE30US on FRED (St. Louis Fed)

Frequently Asked Questions

What is a conventional loan?

A conventional loan follows Fannie Mae and Freddie Mac guidelines. It is not insured by FHA, VA, or USDA. Down payments start at 3% on some programs. Put 20% down and there is no private mortgage insurance. With less down, the lender adds PMI until you have about 20% equity. It can be used anywhere in the U.S., and on a second home or investment property.

What are the conventional loan qualifications?

Six criteria: (1) down payment often starting at 3–5%, (2) credit typically 620+ (740+ for the best pricing), (3) DTI within lender limits, (4) eligible property and occupancy type, (5) loan amount within conforming limits unless it is a jumbo loan, and (6) verified income and assets. See the six requirements, then confirm with a lender.

What is PMI and when does conventional PMI go away?

Private mortgage insurance (PMI) is a monthly charge when you put less than 20% down. It protects the lender. You can ask the servicer to cancel it when the balance reaches 80% of the home's original value and your payments are current. On a primary residence, the servicer must cancel it at 78% of the original value. If the home has gained value, an appraisal can support an earlier request. Twenty percent down avoids PMI at closing.

How much down payment do I need for a conventional loan?

Many buyers qualify with 3% down on first-time buyer programs or 5% on standard conventional products. Twenty percent down avoids PMI. Investment properties and second homes usually require more cash up front than a primary residence.

What credit score do I need for a conventional mortgage?

620 is a common lender floor. Scores of 740 and above usually get the best rates and the lowest PMI. Lower scores may qualify with a larger down payment or higher mortgage insurance cost.

What is the conforming loan limit for 2026?

The 2026 baseline conforming limit is $832,750 for a one-unit home in most counties. High-cost counties can go up to $1,249,125. Loans above the local limit are jumbo mortgages with different underwriting.

Should I use USDA or conventional in a USDA-eligible area?

USDA makes sense when you qualify and you have little cash to put down. It is $0 down, with a 1% upfront guarantee fee and a 0.35% annual fee that lasts for the life of the loan. At about 10% down, conventional is often cheaper if your credit is around 740 or higher. PMI is close to that 0.35% fee, there is no 1% upfront charge, and PMI ends around 20% equity. If your score is closer to 640–680, the USDA fee is usually lower than conventional PMI. Household income still has to be at or below the area limit, and the home has to be a one-unit primary residence. See USDA loans.

Can I use a conventional loan for a second home or investment property?

Yes. Conventional financing covers primary residences, second homes, and investment properties. Down payment and reserve requirements are higher on non-owner-occupied homes. FHA, VA, and USDA are generally limited to a primary residence.

When is conventional better than FHA?

Conventional is the better fit at 20% down, because there is no PMI. It is also often cheaper with less down when your score is around 740 or higher. The lender prices PMI from your credit, and PMI comes off around 20% equity. FHA charges 1.75% upfront, plus monthly mortgage insurance for the life of the loan if you put less than 10% down, or for 11 years if you put 10% or more down. FHA is the better fit when your score is near 620, or when a conventional PMI quote is high.