Do I need 20% down for a conventional loan?

No. Certain conventional programs allow eligible buyers to put down as little as 3%. The required amount depends on the program, occupancy, property and borrower qualifications.

Will I have mortgage insurance?

Typically, conventional financing above 80% loan-to-value requires private mortgage insurance. The cost varies, and removal may be possible after applicable legal, investor and servicer requirements are met.

Can gift funds be used?

Eligible gift funds may be allowed for some or all of the down payment and closing costs, depending on the transaction and program requirements. Documentation of the donor and transfer is generally required.

Can a self-employed borrower qualify?

Yes. Self-employed borrowers can qualify for conventional financing when income, business stability and required documentation meet applicable guidelines.

Can I use a conventional loan for a condominium?

Yes, but the borrower, unit and condominium project must meet applicable eligibility and review requirements.

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Home Financing Options

Conventional Loans

Flexible mortgage options for qualified buyers, homeowners and investors—with a variety of down-payment, property and term choices.

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What Is a Conventional Loan?

A conventional mortgage is financed by a private lender rather than insured by a government agency. Conventional financing can be used for many primary residences, second homes and investment properties, depending on the loan program and borrower qualifications.

Some conventional programs allow qualified buyers to purchase with as little as 3% down. A 20% down payment is not required, although private mortgage insurance is typically required when the down payment is less than 20%.

Down-Payment Options

Eligible programs may allow down payments as low as 3%. Available options depend on occupancy, borrower qualifications and program guidelines.

Mortgage Insurance

Private mortgage insurance may be required with less than 20% down. Unlike some government mortgage insurance, conventional PMI may be removable after applicable requirements are met.

Property Flexibility

Depending on the program, conventional financing may be available for primary homes, second homes, investment properties, condominiums and certain multi-unit properties.

Loan Choices

Fixed-rate and adjustable-rate options may be available with different repayment terms and pricing structures.

Who might consider a conventional loan?

Buyers with established credit and documentable income
First-time or repeat homebuyers
Buyers who want flexible down-payment options
Homeowners refinancing an existing mortgage
Buyers purchasing a second home
Real estate investors purchasing eligible properties
Borrowers who may want mortgage insurance that can potentially be removed
Buyers using eligible savings, gift funds or approved assistance

Potential Benefits

Down payments may be lower than 20%
Multiple fixed- and adjustable-rate options
Financing may be available for several occupancy and property types
PMI may be cancellable when applicable requirements are satisfied
No government upfront mortgage-insurance premium
May provide competitive options for qualified borrowers

Important Considerations

Credit, income, assets and debts must be documented and evaluated
Mortgage insurance may increase the monthly payment
Interest rate and mortgage-insurance pricing vary by borrower and transaction
Condominium and property eligibility requirements may apply
Loan limits vary by county and year
Not every low-down-payment program is available to every borrower

Conventional versus FHA

General educational comparison of conventional and FHA financing
	Conventional	FHA
Loan insurance	Financed by private lenders and not insured by a government agency.	Insured by the Federal Housing Administration.
Down-payment flexibility	Some programs allow as little as 3% down for eligible buyers.	A minimum down payment applies based on FHA guidelines and credit profile.
Mortgage insurance	PMI may apply above 80% LTV and may be removable when requirements are met.	An upfront premium plus ongoing mortgage insurance generally applies.
Credit and qualifying flexibility	Pricing and eligibility are closely tied to credit, income and assets.	May allow more flexibility for some credit and qualifying situations.
Property requirements	Property, condo-project and occupancy eligibility rules apply by program.	Property must meet FHA appraisal and condition standards; occupancy limits apply.
Best fit depends on	Credit profile, available funds, payment goals and long-term plans.	Credit profile, available funds, payment goals and property type.

The right choice depends on your credit profile, available funds, monthly-payment goals, property and long-term plans.

What the Process Looks Like

1
Review your goals, budget and property plans
2
Evaluate income, credit, assets and monthly debts
3
Compare conventional and other eligible loan options
4
Complete preapproval before making an offer
5
Finalize documentation, appraisal and underwriting

Frequently asked questions

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Is a Conventional Loan Right for You?

Let's compare your available options, estimated payment and cash needed so you can make an informed decision before you apply.

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Program availability, eligibility, loan limits, down-payment requirements, mortgage insurance and terms vary by borrower, property, occupancy and lender guidelines. This information is for educational purposes only and is not a commitment to lend or a rate quote.