How much do I need to put down on a conventional loan?

Down payment requirements start as low as 3% for eligible first time buyers purchasing a primary residence. Repeat buyers commonly start at 5%. Second homes and investment properties require more. Your specific requirement depends on the program, property type and qualifications.

Can I remove mortgage insurance from a conventional loan?

Conventional private mortgage insurance is generally cancellable once the loan reaches the equity thresholds set by investor and federal guidelines, either automatically by amortization or by request supported by value. Requirements vary by loan, so review your specific note and servicer requirements.

Is a conventional loan better than an FHA loan?

Neither is universally better. Conventional financing often works well with stronger credit and cancellable mortgage insurance, while FHA can be more forgiving on credit and debt ratios. The right answer depends on your credit profile, down payment and long term plan.

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Conventional Loans

Conventional loans are mortgages that follow guidelines set by Fannie Mae and Freddie Mac rather than a government insurance program. They are the default option for many buyers because they are flexible on property type and occupancy, and because private mortgage insurance can be removed once you build enough equity.

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Who it is designed for

Buyers with reasonably established credit and documentable income
Buyers who want to avoid the permanent mortgage insurance structure used on many FHA loans
Second home and rental property buyers, who cannot use FHA, VA or USDA financing
Homeowners refinancing to change rate, term, or remove mortgage insurance

Eligible occupancy types

Primary residence
Second home
Investment property

Down payment or equity

As little as 3% down for eligible first time buyers on a primary residence, 5% for many repeat buyers, more for second homes and investment properties.

Major benefits

Private mortgage insurance can generally be cancelled as equity grows, unlike most FHA loans
Available on primary residences, second homes and rentals
Wide range of fixed and adjustable term options
Appraisal waivers are sometimes available on qualifying files

Important considerations

Pricing and mortgage insurance cost are sensitive to credit score and down payment
Loan amount limits apply; larger amounts move into jumbo financing
Condo and property condition guidelines can be stricter than government programs

How qualification generally works

Credit history is reviewed along with the credit score
Income is documented and compared to your monthly debts to arrive at a debt to income ratio
Down payment and reserve funds are sourced and seasoned
The property is appraised and must meet program condition requirements

Documents commonly requested

Photo ID and Social Security number for each borrower
Most recent pay stubs covering a full 30 day period, if you receive W2 wages
W2s and/or federal tax returns for the most recent years requested
Two months of asset statements for accounts used for down payment and reserves
Current mortgage statement, homeowners insurance and property tax information on properties you own
Explanations for large or non payroll deposits

Frequently Asked Questions

Related programs and next steps

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Considering conventional loans?

We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.

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