Conventional Loans
Fannie Mae and Freddie Mac financing with removable mortgage insurance, as little as 3% down, and eligibility for primary, second home, and investment properties.
Conventional Loans at a Glance
Program Highlights
✓ PMI removable at 80% LTV
✓ No upfront mortgage insurance fee
✓ Primary, second home, and investment eligible
✓ 15, 20, 25, and 30-year fixed terms
✓ Conforming limit: $832,750 (2026)
Who It's Best For
✓ Stable income with 2-year history
✓ Buyers who want to avoid permanent MI
✓ Second home or investment buyers
✓ Borrowers with 5-20% down payment
✓ Those planning to build equity quickly
How Conventional Loans Work
Conventional vs. FHA
| Feature | Conventional | FHA |
| Min Down Payment | 3% | 3.5% |
| Min Credit Score | 620 | 580 |
| Mortgage Insurance | Removable at 80% | Life of loan* |
| Upfront Fee | None | 1.75% UFMIP |
| Investment Property | Yes | No |
The Conventional Process
Pre-Approval
Credit, income, and assets reviewed. 620 is the floor; pricing improves sharply at 740+.
Shop & Lock
I compare loan-level price adjustments across wholesale lenders to find your best rate and cost combination.
Underwriting & Appraisal
Full documentation review and an appraisal to confirm value and loan-to-value.
Close & Build Equity
Close on a 15, 20, 25, or 30-year fixed term. PMI drops off once you reach 80% LTV.
Who Conventional Works Best For
First-Time Buyers
Down payments start at 3%, with no upfront mortgage insurance fee to finance into the loan.
Buyers Avoiding Permanent MI
PMI is removable at 80% LTV — unlike FHA, where mortgage insurance stays for the life of the loan.
Second Home & Investment Buyers
Conventional is the most flexible program for non-primary occupancy and a wide range of property types.
Credit-Strong Borrowers
At 680+ — and especially 740+ — conventional pricing typically beats government programs on total cost.
Andrew Baker · NMLS 2688601 · (949) 665-9090
Common Questions
What is the minimum down payment on a conventional loan?
3% for a qualifying first-time buyer on a primary residence, and 5% for many other conventional purchases. Second homes and investment properties require more. The lower down payment options carry private mortgage insurance until the loan reaches the equity threshold where it can be removed.
What credit score do I need for a conventional loan?
Conventional guidelines generally start at a 620 score, and pricing and mortgage insurance costs improve as the score rises. Score is one input among several — debt-to-income ratio, down payment, reserves, and property type all factor into whether the file gets an approval and on what terms.
When can I remove PMI from a conventional loan?
Private mortgage insurance can generally be requested for removal once the loan reaches 80% of the original value, and it is required to terminate automatically at 78% on the amortization schedule. Removal based on a new appraised value follows separate investor seasoning rules that vary by lender.
What is the conforming loan limit for 2026?
$832,750 for a one-unit property in most U.S. counties. Designated high-cost counties are higher, up to a ceiling of $1,249,125. Two-to-four unit properties carry higher limits. A loan above the limit that applies in your county is financed as a jumbo loan instead of a conforming one.
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