Conventional Home Loans Make Home Ownership Easy

Almost 80% of home buyers & owners choose a conventional home loan.
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Why Choose A Conventional Loan For Your Home Purchase Or Refinance

Low Down Payment Requirements

Conventional home loans only require a 3% down payment or home equity. This is perfect for first-time home buyers with limited down payment funds or those looking to refinance out of higher-cost loan programs.

Loan Options

Conventional loans offer the largest number of loan options. Borrowers can choose from adjustable or fixed rate loans with 10, 15, 20, 25 or 30 year terms.

Higher Loan Amounts

Loan limits are adjusted each year as home prices change. These changes can make buying or refinancing a home easier to qualify for and more affordable.

Diverse Property Types

Purchase or refinance a primary residence, second home or investment property. Property types can include single-family homes, condominiums, town homes, multi-unit properties and more.

What Other Home Owners Are Saying

Conventional Home Loan FAQs

Find answers to your conventional loan frequently asked questions.

What are the benefits of conventional home loans?

Conventional home loans offer a number of benefits. For starters, conventional loans are not part of any government program, is the most common type of mortgage loan and are widely available from a variety of lenders. On average, around 80% of home buyers and home owners use a conventional home loan to buy or refinance a home. Additionally, conventional home loans only require a 3% down payment. This can make them an attractive option for first-time homebuyers or those with limited savings. Conventional loans don’t have an upfront mortgage insurance premium or a funding fee like government-backed loan programs. Finally, mortgage insurance is only required when putting down less than 20% or has less than 20% equity in their property.

A conventional loan can be used to buy or refinance a primary residence, second home or investment property and do not have a prepayment penalty.

What are the conventional home loan requirements?

Conventional home loans require that borrowers meet basic qualification requirements for credit, debt ratios and money down or available equity. Credit score minimums are a 620 FICO score with no bankruptcy, foreclosure or short sale within the past seven years. Debt-to-income (DTI) ratio limits are capped at 45%, but in some cases can be extended to 49.99% with excellent credit and/or a sizable down payment. Debt ratios are calculated by totaling your monthly credit obligation and dividing them by the gross monthly income.

Borrowers who are paid salary, a wage or are self-employed can qualify for this type of loan. For borrowers with large assets, trust income or other reliable income source(s) may also qualify.

What Property Types Are Allowed With Conventional Home Loans?

Conventional home loans can be used to purchase a variety of different property types. Some of the most common property types that can be purchased with a conventional loan include:

  1. Single-family homes
  2. Townhouses and duplexes
  3. Condominiums
  4. Multi-unit properties (up to four units)

What is the process of getting a conventional home loan?

The process of getting a conventional home loan starts with getting preapproved from a loan officer. You’ll need to provide income documentation and possibly bank statements. The lender will also need to run a credit check.

Once you’ve been preapproved for your home loan, it normally takes 30 days or less to close. You can estimate monthly mortgage payments here.

What Are The Conventional Loan Limits?

The conforming loan limit 2025 is $806,500 for a single-unit property. This is also often called the conventional loan limit. Conforming loan limits also exist for two to four-unit properties.

For conforming loan limits greater than $806,500, the loan is considered a Jumbo loan. Some states and counties in the US also have a High Balance loan limit where housing costs are high. High Balance loans have similar guideline and qualifying requirements as a conventional home loan.

Begin Your Home Buying or Refinance Journey

Schedule a 15-minute consultation to learn more about using a conventional loan to buy or refinance. Get answers to your questions and start your path to home ownership.

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How To Choose A Mortgage Lender

When looking for a lender to help with financing a home, it’s important to find someone who is local and specializes in conventional home loans. Compare your options by finding a loan officer that:

    • Possesses knowledge of the home-buying process and loan program guidelines
    • Has a network of other real estate professionals
    • Demonstrates working with similar clients
    • Knows what resources are available to find the latest information
    • Can show exceptional reviews and testimonials from clients

Many mortgage lenders claim to specialize in conventional loans. However, they typically hire loan officers with little to no experience. The lender doesn’t underwrite the loans themselves, have extended closing times up to 45 days, make you work with a team instead of a single person and don’t respond to your inquiries during the process. Plus, you typically end up with a higher interest rate.

Choosing the right lender could save you thousands of dollars and ensure a positive home buying or refinance experience.

Fannie Mae

Since its founding in 1938, Fannie Mae has been a leading source of mortgage financing in all markets and at all times. Today, they continue to innovate and promote a stronger, safer, and more efficient housing market for all Americans. Their mission is to facilitate fair and sustainable access to homeownership and quality affordable rental housing across America. Fannie Mae is committed to making the dream of sustainable homeownership a reality for millions of people.

Freddie Mac

Freddie Mac is a government-sponsored enterprise, or GSE, with a mission to support the U.S. housing finance system and make it more accessible and affordable for homeowners and renters. This is done by buying conventional homes loans and other mortgages from lenders, packaging them into securities, and selling them to investors around the world. Their work helps keep capital flowing into the housing market, making it possible for more people to buy or rent homes they can afford. Freddie Mac is headquartered in McLean, Virginia, just outside of Washington D.C., and has operations across the country.