Conventional Mortgage Loans

What Is a Conventional Loan?

Conventional loans come with loan amount limits, as shown in the chart below. If you need a loan that exceeds these limits, be sure to visit our Jumbo Loans page for more details.

What Are the 2025 Conventional Loan Limits?


  • Single Family: $806,500
  • Duplex: $1,032,650
  • Tri-plex: $1,248,150
  • Four-plex: $1,551,250

Down Payment & Credit Score Requirements


  • Minimum Down Payment: 3%
    This makes conventional loans accessible to a wide variety of borrowers, from first-time homebuyers to seasoned homeowners.
  • Minimum Credit Score: 620
    Keep in mind that the interest rates for conventional loans are significantly affected by lower credit scores.


Mortgage Insurance


  • When Required: If the borrower makes a down payment of less than 20% (or has less than 20% equity in a refinance), mortgage insurance will be required.
  • Impact of Credit Scores: Borrowers with higher credit scores typically pay lower mortgage insurance premiums. The difference between someone with a 620 credit score and someone with a 760 score can be substantial.


Unique Features of Conventional Loans


  • Mortgage Recasting: One of the key benefits of conventional loans is the ability to recast your mortgage after closing. This allows you to make a significant principal payment, and the bank will recalculate your monthly payment.
  • Self-Employed Borrowers: Conventional loans have more flexible guidelines for self-employed individuals compared to other loan types. Often, only one year of tax returns is required, whereas other loans like VA, FHA, and Jumbo loans typically require two years of tax returns.

 

Property Types Allowed


  • Investment & Second Homes: Unlike VA and FHA loans, conventional loans allow for investment properties and second homes.
  • Manufactured Homes: Conventional loans are also ideal for the purchase of a manufactured home, as VA and FHA loans have stricter requirements in this area.
  • Condominiums: For condominiums, conventional loans are a great choice, as VA and FHA require condos to be on a pre-approved list.


Assumability


  • Non-Assumable: Conventional loans are not assumable mortgages, which means you cannot transfer the loan to another person. VA loans are the only type of assumable mortgage at this time.


Conforming Loans


  • Conventional loans follow the guidelines established by Freddie Mac and Fannie Mae. They are often referred to as “Conforming Loans” because they meet the necessary standards. Loans that don’t meet these guidelines are considered “non-conforming,” and if the issue is simply the loan amount exceeding the limit, they become jumbo loans.

Contact Us for Conventional Loan Guidance

Our team can help you navigate the ins and outs of conventional loans. Whether you're buying your first home or refinancing an existing mortgage, we’re here to guide you through the process and find the best loan solution for your needs.