500+ Reviews from

Conventional Home Loan: Low Down Payment Options, Flexible Requirements, No PMI

  • Shop 100+ lenders
  • 10-21 day closing
  • In house underwriting
Get a rate quote
  • No impact on credit
  • Takes 1 min

Which Conventional Loan Option is Right for You?

Conventional loans are best for borrowers with strong credit scores, offering lower long-term costs compared to FHA loans.

Get a rate quote

  • want a stable monthly payment
  • plan to stay in the home long term
  • prefer predictability over a lower short-term introductory rate
  • want to avoid future rate adjustments

 

  • want a lower initial interest rate
  • expect to move, refinance, or sell before the fixed period ends
  • are comfortable with the possibility of future payment changes
  • want short-term savings upfront
fha-requirements

Conventional Loan Requirements

 

  •  A 620 score is still a common lender benchmark, particularly for Freddie Mac loans.

    However, Fannie Mae’s automated underwriting system no longer has a formal minimum third-party credit score; the complete credit profile is evaluated, and individual lenders may set their own minimums.

 

 

  •  As little as 3% down may be available for eligible primary-residence buyers.

    Many standard conventional loans require at least 5%, while second homes and investment properties generally require more. Eligible gift funds or assistance programs may sometimes be used.

  • Approval depends on income, monthly housing expenses and existing debts.

    Austin Capital mortgage can work with upto 54% DTI while Fannie Mae permits up to 50% DTI through automated underwriting.

  • The property must meet conventional lending standards, and an appraisal or approved valuation must support the purchase price and loan amount.

  • PMI is generally required when the borrower puts down less than 20%.

    Unlike FHA mortgage insurance, conventional PMI may eventually be removed after sufficient equity is established.

 

  • For conforming loans, the 2026 baseline limit is $832,750 for a one-unit property in most U.S. counties.

    Higher limits apply in designated high-cost areas. Conventional loans above these limits may be available as jumbo loans.

A Better Conventional Mortgage Experience: Serving Home Buyers Since 1996

The way your loan is reviewed, communicated, and moved toward closing matters more than many buyers expect. See how Austin Capital Mortgage offers a better mortgage experience.

Other lenders/Banks

Other

Lenders shopped

Limited to 1

Non QM Loans

Limited

Minimum credit score

640+

DTI Requirements

43%

Fast-track Underwriting

No

Approval Rate

Lower

Closing time

30 days

Dedicated Loan Officer

No

Availability

Limited

Average response time

<1 day

Get a rate quote

Today's live rates

See live lender rates from 100+ wholesale lenders. Customize your details to see your best available options today.

500+ Reviews from

30 years of 5-star mortgage service

For over 30 years, we've built our reputation on excellent service and a mortgage experience that puts borrowers first.

Frequently asked questions

A conventional loan is a mortgage that is not backed by a government agency like FHA or VA. It is one of the most common home financing options for buyers.

Qualified buyers may be able to purchase with as little as 3% down through certain conventional loan programs. The exact down payment requirement depends on the program, lender, occupancy, and full loan file.

Credit score requirements vary by lender and program. A 620 score is a common benchmark in some conventional programs, but it is not a universal minimum for every conventional loan scenario.

Most lenders review your credit, income, employment, debt-to-income ratio, down payment, assets, and property type when determining whether you qualify for a conventional loan.

Yes, gift funds may be allowed in eligible conventional loan scenarios, especially for primary residences and some second-home transactions, subject to program and documentation rules.

Down payment assistance may be available in eligible conventional loan scenarios, depending on the borrower, program, and location. Fannie Mae and Freddie Mac both reference assistance programs offered through eligible third parties, housing finance agencies, and local programs.

Conventional loans typically require private mortgage insurance when the loan-to-value ratio is above 80%.

In some cases, yes. Conventional financing can be available for primary residences, second homes, and some investment properties, depending on the loan program and borrower qualifications.

A fixed-rate conventional loan keeps the same interest rate for the life of the loan, while an adjustable-rate mortgage starts with a fixed rate for an initial period and then adjusts based on the loan terms.

Not always. A conventional loan may be a better fit for some buyers, while FHA may be better for others depending on credit, down payment, property type, and long-term cost.

Start Your Pre Approval

Start your pre-approval to view instant live rates and review the right mortgage path with a loan officer.

  • No impact on credit
  • Takes 1 min
  • No docs needed