A Straightforward Path to Homeownership
A conventional loan, also called a conforming loan, is one of the most common ways to buy and refinance a home, and for good reason. With competitive terms, flexible down payment options, and financing designed for everything from first-time buyers to seasoned investors, it's a flexible foundation that works for a variety of situations. If you're in a solid financial position and ready to move, this is often where we start the conversation.
Things to Know
- 3%
- 580
- 45–50%
- Conforming limit
- 10–30 yr
Ready to talk?
A loan officer who answers the phone, knows this program, and will tell you plainly whether it fits.
Disclaimer: Ark-La-TexFinancial Services, LLC d/b/a Benchmark Mortgage – NMLS ID #2143 (www.nmlsconsumeraccess.org) 5160 Tennyson Pkwy STE 1000, Plano, TX 75024. 972-398-7676. This advertisement is for general information purposes only, no guarantee is expressed or implied. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Not all applicants will qualify. Some products may not be available in all states and restrictions apply. (https://benchmark.us)
What “conventional” actually means
A conventional loan is any mortgage that isn’t insured or guaranteed by a government agency like the FHA, VA, or USDA. Most conventional loans are also conforming — they meet the standards set by Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy loans from lenders. That backing is what keeps rates competitive and terms predictable. Conventional loans above the conforming limit are jumbo loans, which have their own page.
How private mortgage insurance works
Put down less than 20% and you’ll pay private mortgage insurance (PMI). The good news: PMI on a conventional loan isn’t permanent. You can request removal once you reach 20% equity, and it drops automatically at 22%. That’s one of the biggest practical differences from FHA, where mortgage insurance usually lasts the life of the loan.
HomeReady and Home Possible
Fannie Mae’s HomeReady and Freddie Mac’s Home Possible are conventional programs built for first-time and moderate-income buyers: 3% down, reduced PMI, and flexibility on who can contribute to the down payment. Both can stack with state and local down payment assistance. Check out the Down Payment Assistance page for more information.
Conventional vs. FHA at 3% vs. 3.5%
The half-percent difference in down payment is rarely the deciding factor. What matters is credit: with a strong score, conventional PMI is cheaper and removable; with a lower score or thinner file, FHA’s pricing is friendlier. We’ll run both and show you the real monthly difference.
What makes it work for you?
- First-time homebuyer? Put as little as 3% down
- Minimum credit score of 580
- Loan terms from 10 to 30 years
- Debt-to-income ratios up to 45–50%
- Mortgage insurance can be removed once you reach 20% equity
- Available for primary residences, second homes, and investment properties
- Fixed-rate or adjustable-rate options
A good fit if you…
- Have solid credit and want mortgage insurance that goes away
- Are buying a primary residence, second home, or investment property
- Want to stay under the conforming loan limit with a fixed or adjustable rate
- Are a first-time buyer who qualifies for HomeReady or Home Possible
Probably not the right fit if you...
- Have a credit score below 580 or a thin credit file (FHA may fit better)
- Need 100% financing (look at VA or USDA)
- Are buying above the conforming limit (see Jumbo)
Additional options to think about
Compare with other programs
FAQ
Short, honest answers. Your loan officer can go deeper on any of these.
Do I need a 20% down payment to buy a home?
No. Many buyers put down less, depending on the loan program. There are several options designed to make homeownership more accessible — including FHA (3.5% down), VA and USDA (0% for those who qualify), and conventional loans with as little as 3% down for first-time buyers.
When does PMI go away?
On conventional loans you can request PMI removal at 20% equity, and it terminates automatically at 22%. The loan summary estimates how long that takes at your inputs.
Can I use a conventional loan on an investment property?
Yes. Conventional financing is available for primary homes, second homes, and investment properties. Down payment requirements rise with occupancy type — typically 15–25% for an investment property versus as little as 3% for a primary residence.
What is the conforming loan limit this year?
The conforming loan limit is set each year by the FHFA and varies by county. Loans above it are jumbo loans. Your loan officer can confirm the current limit for the county you’re buying in. [CONFIRM: add current-year baseline limit]
Should I choose a fixed rate or an ARM?
A fixed rate stays the same for the life of the loan. An ARM starts with a lower fixed period (often 5, 7, or 10 years) and then adjusts. ARMs can make sense if you expect to sell or refinance before the fixed period ends.
HOW IT WORKS
Four steps from here to keys
Talk to a loan officer
A 15-minute conversation about where you are and where you want to go.
Get pre-approved
You provide supporting documents like income statements, W-2s, and bank statements. Most of it can be uploaded in minutes.
Shop with confidence
We handle the appraisal and the paperwork sellers worry about.
Sign & Close
Sign, fund, and get the keys. We stay on the file until the end.
Talk to a loan officer
A 15-minute conversation. No obligation. Real answers from a loan officer who answers the phone.