What is a Conventional loan?

A conventional mortgage refers to a loan that is a non-government loan that meets requirements set by the Federal Housing Finance Agency (FHFA) and meets the funding criteria of Freddie Mac and Fannie Mae. Conventional loans are designed for good-to-great credit and income consumers.  Conventional mortgages offer low interest rates to borrowers with excellent credit scores.  For loans with ha 20% down payment, there is no mortgage insurance required. 

Who qualifies for a conventional loan?


  • Homebuyers with good credit (min credit score is 620)
  • A qualifying debt-to-income ratio- you should be under 43%
  • Homebuyers who do not need to borrow more than their county limits

Benefits of a Conventional Loan:


  • No upfront mortgage insurance fee
  • Better options to avoid costly monthly mortgage insurance
  • Both fixed-rate and adjustable-rate options

Conventional Mortgages are great it you have a higher credit score, cash assets saved, and meet the debt-to-income ratio.