What Is a Conventional Loan?
A conventional loan is a mortgage that isn't insured or guaranteed by a government agency like the FHA, VA, or USDA. Instead, it typically follows underwriting guidelines set by Fannie Mae and Freddie Mac. That's why it's the most common loan type in the U.S. — it's flexible enough to fit a wide range of buyers and property types.
Down Payment & Mortgage Insurance
Depending on the program, conventional loans allow down payments as low as 3% for qualified buyers. If you put down less than 20%, you'll typically pay private mortgage insurance (PMI) — but unlike FHA's mortgage insurance, PMI on a conventional loan can be removed once you reach roughly 20% equity, which can meaningfully lower your monthly payment over time.
Who It's For
- Buyers with steady income and reasonably strong credit
- Move-up buyers with existing home equity to bring to the table
- Anyone who wants to avoid the upfront mortgage insurance premium required on FHA loans
- Buyers purchasing a second home or investment property (government-backed programs generally don't allow this)
What You'll Need
Expect to provide standard income and asset documentation — pay stubs, tax returns, bank statements — along with a credit check. Barry will walk you through exactly what's required for your situation during your free consultation, with no hard credit pull required to get started.