Conventional Loans
Flexible mortgage financing not backed by a government agency — available for primary residences, second homes, and investment properties.
What Is a Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by a federal government agency. Unlike FHA, VA, or USDA loans, conventional loans are originated and backed by private lenders and, in most cases, sold to government-sponsored enterprises (GSEs) like Fannie Mae or Freddie Mac.
Because conventional loans are not government-backed, they typically have stricter qualification requirements — particularly around credit score and income documentation. However, they also offer more flexibility in terms of property type, loan structure, and the ability to remove mortgage insurance once you've built sufficient equity.
Conforming vs. Non-Conforming Loans
Conforming Loans
Conforming loans meet the guidelines set by Fannie Mae and Freddie Mac, including loan limits that are set annually and vary by location. Most conventional loans are conforming loans.
Jumbo Loans
Jumbo loans exceed the conforming loan limits and are not eligible for purchase by Fannie Mae or Freddie Mac. They are held by the originating lender or sold to private investors. Jumbo loans typically have stricter qualification requirements.
Key Features of Conventional Loans
Property flexibility
Conventional loans can be used for primary residences, second homes, and investment properties — unlike FHA loans, which are limited to primary residences.
Private mortgage insurance (PMI)
If your down payment is less than 20%, you'll typically be required to pay PMI. Unlike FHA mortgage insurance, PMI on a conventional loan can generally be removed once you reach a certain equity threshold.
Credit and income requirements
Conventional loans generally require a stronger credit profile and more straightforward income documentation than FHA loans. Self-employed borrowers or those with complex income may find qualification more challenging.
Loan term options
Conventional loans are available in a range of term lengths, including 15-year and 30-year fixed options, as well as adjustable-rate mortgages (ARMs).
Down payment
Conventional loans are available with a range of down payment options. Lower down payments are possible but may require PMI and affect your loan terms.
Important Notes
This overview is for general educational purposes only. Conventional loan requirements and guidelines vary by lender and program. Actual eligibility and terms depend on your individual circumstances. All loans subject to credit approval.
Want to explore whether a conventional loan fits your situation?
Let's talk through your financial picture and goals. I can help you understand whether a conventional loan — or another program — may be the right fit.