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Home / Purchase loans / Conventional mortgage

Purchase loans

The standard everyone else gets compared to.

Conventional financing is the most common path to homeownership — competitive rates, flexible terms, and no upfront mortgage insurance premium like FHA requires.

Start my application Call (773) 354-3135

What is a conventional mortgage?

Not backed by a government agency — and that's fine

A conventional mortgage is any home loan not insured or guaranteed by a government agency like the FHA, VA, or USDA. Instead, it follows underwriting guidelines set by Fannie Mae and Freddie Mac, the entities that buy most conventional loans on the secondary market. For buyers with solid credit and steady income, conventional often means lower overall costs than government-backed alternatives — especially once private mortgage insurance (PMI) drops off at 20% equity.

Who conventional loans fit best

Strong credit, steady income

Borrowers with credit scores 620+ and consistent W-2 or documented income typically get the most competitive conventional pricing.

Buyers who can reach 20% down

PMI cancels automatically at 78% loan-to-value, and can often be removed sooner with an appraisal — conventional rewards a stronger down payment.

Move-up & repeat buyers

No upfront mortgage insurance premium and flexible property types make conventional a natural fit beyond a first home.

Second homes & investment property

Unlike FHA and VA, conventional financing is available for non-primary residences.

Conventional loan highlights

  • Down payments as low as 3% for qualifying first-time buyers
  • No upfront mortgage insurance premium (unlike FHA)
  • PMI cancels automatically once you reach 78% loan-to-value
  • Available for primary residences, second homes, and investment property
  • Fixed and adjustable-rate options
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Conventional vs. government-backed

Where conventional wins — and where it doesn't

Advantages

  • No upfront mortgage insurance premium
  • PMI cancels once you build enough equity
  • Works for second homes and investment property
  • Often the lowest long-term cost for strong-credit borrowers

Considerations

  • Stricter credit and income requirements than FHA
  • Down payment below 20% requires PMI
  • Less forgiving on past credit events than government programs
  • Conforming loan limits apply (jumbo financing needed above that)

Conventional loan questions

What buyers ask us most

Can I really put down just 3%?
Yes, for qualifying first-time buyers using programs like Fannie Mae HomeReady or Freddie Mac Home Possible. Most other conventional buyers put down 5–20%, with PMI required below 20%.
How is conventional different from FHA?
FHA is more forgiving on credit and down payment but requires mortgage insurance for the life of the loan in most cases. Conventional PMI cancels automatically once you reach 78% equity, which often makes it cheaper long-term for borrowers who qualify.
Can I use a conventional loan for a rental property?
Yes — conventional financing (with different down payment and rate requirements than owner-occupied) is one of the more accessible paths to financing an investment property, alongside DSCR loans.
What credit score do I need?
Most lenders look for 620+, though the best pricing typically starts around 700+. We'll show you real numbers based on your actual credit profile.

Let's see what conventional financing looks like for you

Send Patrick your numbers and he'll show you real conventional pricing — no guesswork, no pressure.

Start my application → Call (773) 354-3135