Conventional Loans

  • Purchase
  • Refinance
  • Cash Out
  • Consolidation
  • Residence
  • Investment
  • Renovation
  • Ground Up Construction

You can use Conventional Mortgage Loans for the financing purposes of PURCHASE, REFINANCE, CASH-OUT, DEBT-CONSOLIDATION, RENOVATION, REHAB, REMODEL, GROUND UP CONSTRUCTION for both your primary residence and for rental investment property.

Conventional Home Loans

Smart Financing for Your Dream Home

With as little as a 3% down payment, discover why conventional loans are the most popular mortgage option for homebuyers across America. With competitive rates, flexible terms, and lower monthly payments, find out if a conventional loan is your best path to homeownership.

What Are Conventional Loans?

Conventional loans are primarily funded by private lenders and financial institutions, though the process is influenced by the secondary mortgage market and government-sponsored enterprises (GSEs). Conventional loans meet the guidelines set by the Federal Housing Finance Agency (FHFA), which allows them to be purchased by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. To free up capital for more lending, mortgage lenders typically sell conventional loans on the secondary mortgage market.

Key Features:

  • Available for both Primary Residence, Second Home, and for Investment properties.

  • Available in fixed-rate and adjustable-rate options.

  • Terms typically range from 10 to 30 years.

  • Minimum credit score requirements typically start at 620.

  • Down payments as low as 3% for qualified first-time homebuyers.

  • Private Mortgage Insurance (PMI) required for down payments less than 20%.

Conventional Home Loans

Key Benefits of Conventional Loans

Conventional loans offer numerous advantages for qualified borrowers seeking the best mortgage option

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Lower Down Payment Options

Conventional loans offer down payments as low as 3% for qualified first-time homebuyers or 5% repeat buyers.

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Competitive Interest Rates

Enjoy some of the most competitive interest rates in the mortgage market, potentially saving you thousands over the life of your loan.

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No Upfront Mortgage Insurance

Unlike FHA loans, conventional loans don't require upfront mortgage insurance premium payments.

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Loan Usage

Available for both Primary Residence, Second Home, and for Investment properties.

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Flexible Loan Terms

Choose from various term options including 15, 20, and 30-year fixed-rate or adjustable-rate mortgages.

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PMI Can Be Removed

Once you reach 20% equity in your home, you can request to have the Private Mortgage Insurance removed.

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Higher Loan Limits

Conventional loans offer higher loan limits compared to some government-backed loans, allowing you to purchase more expensive homes.

Documentation You'll Need

The list of documentation items shown below is a good general list. However, based on your borrower profile overlayed with the specific loan program underwriting guidelines, you may need to provide additional information. In some circumstances, you may not need to provide the entire list of items. Speak with Rodney Rose, your trusted loan officer, for your specific documentation needed.

  • Tax returns - You will need to fill in a Form 4506-T, and provide your tax forms (the last 2 years should suffice).

  • Pay stubs, W-2s, 1099's, K-1's, or other proof of income -These include your most recent 1 month of pay stubs. If you are self-employed you must provide the two most recent tax returns as well as a year-to-date profit and loss statement. If you file a separate business tax return, you will need to provide the most recent 2 years along with a year-to-date profit and loss statement.

  • Bank statements and other assets - Lenders need your most recent 2 months bank statements and may request proof of your retirement accounts, assets, as well as other investment accounts.

  • Credit history and FICO score - Your credit report will be obtained which will provide details of your credit payment history, including any episodes of bankruptcies or foreclosures.

  • Gift letters - If any friend or family member wants to help you with the down payment or closing costs by offering you some cash you must provide a “gift letter” which states that the money is a gift and not a loan.

  • Photo ID - Provide a government issued ID with photo such as a driver's license or passport.

  • Renting history - Your history as a tenant on rent to guarantee you can pay your rent bills on time.

  • Co-Borrower or Co-Signor - If a Co-Borrower or Co-Signor is used in qualifying. You will need to provide all of the same items for them also.

  • Purchase Agreement - Legally binding contract between a buyer and a seller that outlines the terms and conditions of a property sale.

Start Your Conventional Loan Application Today!

Secure competitive rates, flexible terms, and a smooth path to homeownership with a trusted conventional loan.

The Conventional Loan Process

A simple step-by-step guide to getting your conventional mortgage

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Submit Your Application

Complete a full mortgage application and provide all necessary documentation for underwriting.

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Get Pre-Approved

Start with a pre-approval to understand your budget and show sellers you're a serious buyer. We'll review your credit, income, and assets.

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Find Your Dream Home

Work with a real estate agent to find a home that meets your needs and falls within your pre-approved budget.

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Processing & Underwriting

We'll verify your information, order an appraisal, and ensure all requirements are met for loan approval.

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Close On Your Loan

Review and sign your final loan documents, pay your closing costs, and receive the keys to your new home!

Eligibility Requirements

Understanding what lenders look for can help you prepare for the mortgage application process

Credit Score

✅Minimum Requirement: 620+

✅Preferred Qualification: 740+ for best rates

⚠️Your FICO credit score is a major eligibility factor for a conventional loan and in determining your interest rate.

Debt-to-Income Ratio

✅50% maximum

⚠️This ratio compares your monthly debt payments to your gross monthly income. Lower DTI ratios demonstrate better ability to manage mortgage payments.

How Do Conventional Loans Compare?

See how conventional loans stack up against other popular mortgage options

Feature Conventional FHA VA USDA
Minimum Down Payment 3-5% 3.5% 0% 0%
Minimum Credit Score 620+ 500+ No minimum (620+ typical) 640+ typical
Mortgage Insurance PMI required if down payment is less than 20% (can be removed) Upfront MIP + Annual MIP (cannot be removed for most loans) Funding fee (no monthly MI) Upfront guarantee fee + Annual fee
Property Type Restrictions Primary, secondary, investment Primary residence only Primary residence only Primary residence in rural areas only
Income Limits None for standard loans None None Limited to moderate incomes

Frequently Asked Questions

What is the difference between a conforming and non-conforming conventional loan?

Conforming conventional loans meet the guidelines set by Fannie Mae and Freddie Mac, including loan limits. Non-conforming loans, like jumbo loans, exceed these limits or have other characteristics that don't meet standard guidelines.

How much of a down payment do I need for a conventional loan?

Conventional loans typically require a minimum down payment of 3% for first-time homebuyers and 5% for others. However, putting down 20% or more will help you avoid paying Private Mortgage Insurance (PMI) and may result in better interest rates.

What credit score do I need to qualify for a conventional loan?

The minimum credit score for a conventional loan is typically 620. However, a higher score (740+) will help you qualify for the best interest rates and terms.

Can I use gift funds for my down payment on a conventional loan?

Yes, conventional loans allow you to use gift funds for your down payment. However, the gift must be properly documented with a gift letter and proof that the funds have been transferred from the donor to you.

How long does it take to get approved for a conventional loan?

The timeline for conventional loan approval typically ranges from 30 to 45 days from application to closing. However, this can vary based on your financial situation, the property being purchased, and current market conditions.

What is Private Mortgage Insurance (PMI) and can it be removed?

PMI is insurance that protects the lender if you default on your loan. It's typically required when your down payment is less than 20%. PMI can be removed when you reach 20% equity in your home, either through requesting cancellation or through automatic termination when you reach 22% equity based on the original amortization schedule.

What are the current conventional loan limits?

Conventional loan limits are adjusted annually. For 2023, the conforming loan limit for one-unit properties is $726,200 in most areas, and up to $1,089,300 in high-cost areas. These limits vary by county and property type.

Can I refinance an FHA loan to a conventional loan?

Yes, many homeowners refinance from FHA to conventional loans, especially to eliminate the permanent FHA mortgage insurance. This is commonly done when you've built at least 20% equity in your home and your credit score has improved.

© Copyright 2025 by E Mortgage Capital. Inc.

Notice To Texas Loan Applicants: Consumers wishing to file a complaint against a mortgage banker, or a licensed mortgage banker residential mortgage loan originator, should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, TX 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov.

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 www.nmlsconsumeraccess.org

Loan Officer at E Mortgage Capital, Inc. 3750 S Susan Street Santa Ana, Ca. 92704. NMLS#1416824 NMLS#1396861 DRE#00853403. Equal Housing Opportunity Lender. https://www.nmlsconsumeraccess.org. For State Requirements, go to https://www.emortgagecapital.com/licensing.