Unlike FHA, conventional PMI is not permanent. It can be removed once you reach 20% equity in your home, either through paying down the balance or through home value appreciation.
The Most Popular Choice
Conventional Loans: Versatile Financing for Every Home
A conventional loan offers the most flexibility for primary residences, second homes, and investment properties. Lock in a competitive rate and build equity faster.
Primary, Second & Investment
Use a conventional loan for your main home, a vacation property, or a rental — unlike FHA and VA, there are no primary residence restrictions.
PMI That Goes Away
Put less than 20% down and pay PMI — but unlike FHA, conventional PMI automatically cancels once you reach 20% equity in your home.
Higher Loan Limits
The 2026 conforming limit is $832,750. Need more? Jumbo conventional loans go up to $2M+ for luxury properties.
Conventional Loan Programs
Tailored options for every type of buyer and property.
Most Popular
Standard Conventional
5% Down Payment
The go-to choice for many homebuyers. Offers competitive rates and the ability to cancel PMI once you reach 20% equity.
- 5% min. down
- 620+ credit score
- Loans up to $832,750
- PMI cancels at 20% equity
First-Time Buyers
Fannie Mae HomeReady
3% Down Payment
Designed for low-to-moderate income buyers with reduced PMI rates and flexible income source guidelines.
- 3% min. down
- 620+ credit score
- Reduced PMI rates
- Gift funds allowed
First-Time Buyers
Freddie Mac Home Possible
3% Down Payment
A great alternative for buyers in lower income brackets, offering flexible requirements and reduced mortgage insurance.
- 3% min. down
- 660+ credit score
- Flexible income rules
- Reduced PMI
High-Value Homes
Jumbo Conventional
Above $832,750
For luxury properties that exceed standard loan limits. We shop multiple lenders to find your best high-balance rate.
- Loan amounts to $2M+
- 10–20% down typical
- 700+ credit score
- Competitive luxury rates
Investors
Investment Property
15–25% Down
Build your rental portfolio with conventional financing for 1–4 unit properties. Versatile and reliable for long-term growth.
- 15% down (1-unit)
- 1-4 unit properties
- Primary or investment
- Stable long-term terms
Refinance
Conventional Refinance
Rate or Cash-Out
Lower your monthly payment, shorten your loan term, or tap into your home's equity for major expenses.
- Rate & term options
- Cash-out available
- Equity access
- Fast closing
2026 Qualification Benchmarks
Standard requirements for conventional financing.
| Requirement | Standard Conv. | HomeReady / Possible |
|---|---|---|
| Min. Down Payment | 5% | 3% |
| Min. Credit Score | 620 | 620 (660 preferred) |
| Max. Loan Amount (2026) | $832,750 | $832,750 |
| Max LTV | 95% | 97% |
| PMI Required | If <20% down | Reduced PMI |
| Property Types | All Types | Primary Only |
Conventional vs FHA vs VA
We run this analysis for every client to find your true winner.
| Feature | Conventional ✓ | FHA | VA |
|---|---|---|---|
| Min. Down Payment | 3% (HomeReady) | 3.5% | $0 (Veterans) |
| Min. Credit Score | 620 | 500-580 | No set minimum |
| Mortgage Insurance | PMI — cancels at 20% | MIP — often for life | None |
| 2026 Loan Limit | $832,750 (+ jumbo) | Varies by county | No limit |
| Property Types | Primary, 2nd, Investment | Primary only | Primary only |
Our Approach
We run the numbers on every loan type for you — conventional, FHA, and VA — so you can see the true monthly cost and long-term savings of each option side by side. Most clients are surprised by which one actually wins.
Why Buyers Choose Conventional
PMI That Cancels
Unlike FHA MIP which often lasts the life of the loan, conventional PMI cancels automatically at 20% equity.
Buy Any Property Type
Primary home, vacation cabin, or a rental duplex — conventional covers them all with ease.
3% Down for First-Time Buyers
HomeReady and Home Possible programs open the door with just 3% down — even less than FHA.
No Upfront Funding Fee
FHA and VA have upfront fees. Conventional has neither — your down payment goes straight to equity.
Competitive Rates at 680+
Borrowers with strong scores often find conventional rates beat FHA once insurance is factored in.
Cash-Out Refinance
Access your home's equity to fund improvements or consolidate debt with flexible cash-out options.
Conventional Loan FAQs
-
When does PMI go away on a conventional loan?
-
Can I use a conventional loan for a second home?
Yes! Conventional loans are the primary choice for vacation homes and second properties, with down payments typically starting at 10%.
-
What is a 'conforming' loan limit?
A conforming loan limit is the maximum amount Fannie Mae and Freddie Mac will finance. For 2026, this limit is $832,750 for most of the US. Loans above this are considered 'Jumbo'.
-
Is a 20% down payment required?
Absolutely not. While 20% down eliminates PMI, you can buy a home with as little as 3% down using first-time homebuyer programs like HomeReady or Home Possible.
Is Conventional Right for You?
We run a side-by-side comparison for every buyer — no cost, no obligation, and no credit check to start.
Related Resources:
- KYLE JESSEE LENDING TEAM
- MOVEMENT MORTGAGE
184 Duke of Gloucester St Suite 1B, Annapolis, MD 21401
NMLS #1212644 | Kyle.Jessee@movement.com