Conventional
The most common mortgage in the U.S., bought by Fannie Mae and Freddie Mac after closing.
Who it fits
Borrowers with established credit and steady, documentable income. Down payments start at 3% for some first-time buyers and 5% for most others. A larger down payment lowers both the rate adjustments and the mortgage insurance.
Loan size
For 2026 the baseline conforming limit for a one-unit home is $832,750, set by the Federal Housing Finance Agency. A few high-cost counties allow more, up to $1,249,125. Above the limit for your county, the loan is a jumbo.
Mortgage insurance (PMI)
With less than 20% down, a conventional loan carries private mortgage insurance. Unlike FHA insurance, it doesn't last for the life of the loan: you can ask to cancel it when the balance reaches 80% of the original value, and federal law ends it automatically at 78% if you're current on payments.
What the underwriter looks at
- Credit score and history (programs commonly start around 620)
- Debt-to-income ratio, usually up to the mid-40s and sometimes 50% with strong compensating factors
- Two years of stable income, with tax returns for the self-employed
- Funds for down payment, closing costs and sometimes reserves
Reviewed by Mustafa Temiz, CPA, NMLS #2450795 · Updated November 2026
Talk to someone who reads tax returns for a living
A short pre-application takes about five minutes. We call you back, look at your numbers and tell you plainly which loan programs fit.