Conventional Purchase
Conventional Refinance rate & term
Conventional Cash-Out
Conventional Renovation
Conventional Construction
· Less lenient on credit issues
· Less strict on property standards
· Wide range of down payment options
· FICO score minimum 620, over 700 preferred
· Mortgage Insurance is required with less than 20% down payment, however the cost of the insurance reduces with the size of the down payment. Additionally, Mortgage Insurance can be eliminated after 20% equity is earned.
Conventional loans are the most common type of home loan in the U.S. Conventional loans are not backed by a federal government agency like the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA). Compared to most government-backed loans, you’ll need a slightly higher credit score and a stronger financial history to qualify for a conventional loan. Conventional loans are widely available through banks or online lenders and offer competitive interest rates and flexibility. The terms you’re offered on a conventional loan and your ability to repay it is between you and your lender. The interest rate and mortgage insurance that you receive is impacted by your FICO and your down payment amount. The better your FICO and down payment earns you a lower payment from lower interest rate and lower mortgage insurance.
Conventional Loan Purpose can be used for both primary residence, secondary residence, and for investment properties.
Down Payment can come from yourself, family gifts, or approved programs. Down payment amounts start at a minimum of 3% of the purchase price for a single-family primary residence to 5% for a 2-4 family primary residence. Down payment amounts start at a minimum of 15% of the purchase price for investment properties.
Debt-to-income ratio or DTI, is the percentage of your monthly pre-tax income that you spend to pay your debts, including your mortgage, student loans, auto loans, child support and minimum credit card payments. The higher your DTI, the more likely you are to struggle with your bills. There are 2 DTI ratios calculated in qualifying. The first is just the housing expense payment with your (PITI) mortgage, property taxes, home insurance, and HOA, if any. The second is your PITI plus your monthly minimum payments shown on your credit report which typically are items like credit cards, vehicles, student loans, and retail store cards added together. These numbers are divided into your gross monthly income to obtain your DTI ratios. Higher DTI ratios are typically allowed in FHA loans which means more of your income is counted to qualify you.
Mortgage insurance protects the lender in case of default. Conventional loans require mortgage insurance, however the cost of the mortgage insurance reduces as the down payment increases. Credit scores are a factor for conventional mortgage insurance. Conventional loans require Mortgage Insurance until the loan balance is below 80% of the original purchase price with one exception if you obtain an appraisal to prove the current value creates the necessary 20% equity.
Mortgage rates are usually higher than FHA and government backed loans. However, the government backed loans have additional fees added into the payment which make the monthly payments similar to each other even though the interest rates are different. Additionally, conventional loan rates can get lower with better borrower profiles with FICO, LTV, and DTI.
Conventional Loan Limits The 2025 Conventional loan limit is $806,500 in low-cost areas and $1,209,750 for single family residences in expensive markets. The loan limits are exceeded for 2-4 family properties. Some counties also have limits falling between this minimum and maximum. Regulators may change the loan limits annually. Conventional loan limits in some Counties are higher than FHA loan limits. Additionally, Conventional loans have an option to exceed the loan limits called High Balance which is an option before going to the Jumbo Loan Market.
Conventional Property Appraisal and Standards the condition and intended use of the property you hope to buy are important factors. Conventional appraisals are less stringent than FHA and government backed appraisals with regards to issues or conditions of the properties especially with larger down payments. However, Life, Health, and Safety issues are always an important concern.
18071 Fitch Ste 200, Irvine CA 92614
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3401 Mallory Lane, Franklin, TN 37067
For information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. E Mortgage Capital, Inc. d/b/a E Mortgage Capital, NMLS# 1416824. Equal Housing Lender (NMLS consumer access: https://www.nmlsconsumeraccess.org/_)
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A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at