Conventional Home Loan

A conventional loan is backed by Fannie Mae or Freddie Mac with loan amounts under $726,200.

Currently Licensed States


A conventional home loan follows the established underwriting guidelines set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). This type of home loan is the most commonly used loan program in the country for home purchases and refinances.

Loan Uses

You may use a conventional loan for the following transactions:

  • Purchase – Finance the purchase of an existing home or new construction home.
  • Rate & Term Refinance – Refinance any current mortgage loan(s) that were used to purchase a home that provides a financial benefit to the borrower by lowering the interest rate, monthly payment or removing mortgage insurance. Second mortgage loans that were not used to purchase the property can be subordinated to the new conventional home loan. Borrowers are unable to receive more than $2,000 cash back at closing. Texas residents may not receive any cash back at closing.
  • Cash out Refinance – Utilize the equity in your home to consolidate debt, make home improvements or to receive cash for any need. Texas residents may not exceed 80% loan-to-value with a cash out refinance.

Loan Amounts

The conforming loan limit of $726,200 is set by Fannie Mae and Freddie Mac for a conventional home loan.

For loan amounts in excess of $726,200, high-cost areas are eligible for a High Balance home loan. Otherwise, please refer to the Jumbo Home Loan page.

Down Payment

The minimum amount of down payment for a conventional loan is 5% of a home’s purchase price, unless you are first-time home buyer. For a down payment less than 20%, you must have mortgage insurance.

Down payments of 20% or more does not require mortgage insurance.

Mortgage Insurance

Mortgage insurance protects the mortgage company against losses caused by a homeowner’s default on a mortgage loan. Mortgage insurance (or MI) typically is required if the homeowner’s down payment is less than 20% of the purchase price.

Mortgage insurance for a conventional home loan can be paid monthly, as a single premium at closing or by the lender.

Property Types

You may use a conventional loan for the purchase or refinance of the following property types:

  • Single family residenceone unit, attached or detached including town homes
  • Modular Homes – must have standard foundation
  • Multi-unit – two to four units
  • Mixed Use Property – condominiums & PUDs where the commercial space does not exceed 25%
  • Condominiums – Fannie Mae/Freddie Mac approved attached and detached
  • Planned Unit Developments – PUDs
  • Investment property – up to ten properties

Credit Requirements

Credit requirements for a conventional home loan are more stringent than some other loan programs. You must have at least a 620 FICO score with two or more credit bureaus. A higher credit score may be required depending on the down payment amount and/or property type.

For more specifics relating to conventional loan credit requirements, including bankruptcy, foreclosure, short sale and more; please visit the conventional loan credit requirements page.


Purchase or refinance an owner-occupied property, second home or investment property with a conventional home loan.

Apply for a conventional home loan today!


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