Conventional loans — the foundation of home financing.

A conventional loan is a mortgage that is not insured or guaranteed by the federal government (unlike FHA, VA, or USDA). It follows guidelines set by Fannie Mae and Freddie Mac, offering fixed-rate and adjustable-rate options with competitive terms for qualified borrowers.

Conventional loans require as little as 3% down for first-time buyers and 5% for repeat buyers. However, putting down less than 20% requires private mortgage insurance (PMI), which can be removed once you reach 20% equity.

Most conventional lenders require a minimum credit score of 620, but the best rates and terms are reserved for scores of 740 or higher. Borrowers with scores between 620–679 can still qualify but may pay slightly higher rates.

In 2026, the baseline conforming loan limit is $832,750 for a single-family home in most Colorado and Florida counties. High-cost counties (like Denver, Boulder, Eagle, Pitkin, Summit, Miami-Dade, and Collier) have limits up to $1,149,825.

Private mortgage insurance (PMI) is required when your down payment is less than 20%. It typically costs 0.3–1.5% of the loan amount annually. Unlike FHA mortgage insurance, PMI can be removed once your loan balance reaches 80% of the home's original value — either through payments, appreciation, or a combination.

A fixed-rate mortgage keeps the same rate for the life of the loan (typically 15 or 30 years), providing payment stability. An adjustable-rate mortgage (ARM) starts with a lower fixed rate for an initial period (5, 7, or 10 years) then adjusts periodically. ARMs are ideal if you plan to sell or refinance before the adjustment period.

Yes — conventional loans are the primary financing option for second homes (typically 10% down) and investment properties (15–25% down). Unlike government-backed loans, conventional financing has no occupancy restrictions.