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Explore Your Financing Options
Review your credit, income, debts, available down payment, and purchase goals. Explore conventional programs that may fit your circumstances, including qualifying low down payment options.
CONVENTIONAL HOME PURCHASE LOANS
Conventional Home Loans. More Options. More Possibilities.
Buying a home doesn’t always require a 20% down payment. Conventional mortgage programs may offer financing with as little as 3% down for qualified buyers, along with flexible 5%, 10%, 15%, and 20% down payment options. Explore mortgage financing designed around your credit, available funds, property, and homeownership goals.
3% Down
Available through certain
conventional programs for
qualified homebuyers.
20% Down
Generally avoids borrower-paid
private mortgage insurance
on eligible purchase loans.
Conventional mortgages are subject to applicable credit, income, asset, property, and lender underwriting requirements. Low down payment program availability varies. Mortgage insurance may apply with less than 20% down. Financing is not guaranteed.
Your Home. Your Financing Options.
Explore conventional mortgage programs with different down payment and repayment options.
Find Conventional Loans Programs in Your City
Select your state and search for your city to explore local mortgage information for this specific loan program.
Select a state to begin.
UNDERSTANDING CONVENTIONAL FINANCING
How Does a Conventional Home Loan Work?
Conventional mortgages are home loans that are not insured or guaranteed by a federal government mortgage program. They offer a variety of financing structures for eligible homebuyers.
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Get Pre-Approved & Find a Home
Connect with an iLoan mortgage professional to review your financing options and begin pre-approval. Then search for a qualifying home within your budget.
03
Complete Your Mortgage
After your offer is accepted, your loan proceeds through documentation, appraisal or eligible appraisal alternatives, underwriting, and closing. Final approval depends on lender and program requirements.
Conforming vs. Non-Conforming Conventional Loans
Conforming conventional mortgages meet applicable eligibility and loan-size requirements for purchase by Fannie Mae or Freddie Mac. Non-conforming conventional loans do not meet all of those standards. For higher-priced properties, explore our Jumbo Loan Programs. Both categories are subject to lender underwriting and property requirements.
How Much Down Payment Do You Need for a Conventional Loan?
Conventional home loans offer more down payment flexibility than many buyers realize. Your available options depend on the loan program, property, and qualification requirements.
Low Down Payment
Available through qualifying programs such as HomeReady and certain 97% LTV mortgages. PMI generally applies.
Flexible Financing
A common conventional purchase option for eligible borrowers. PMI generally applies.
More Equity Upfront
Reduces the amount financed. PMI generally still applies to standard conventional loans.
Lower Loan Balance
May reduce borrowing costs and mortgage insurance expenses compared with a smaller down payment.
Generally No PMI
Typically eliminates the need for borrower-paid PMI on an eligible conventional purchase.
Example: Down Payments on a $350,000 Home
3% Down
$10,500
5% Down
$17,500
10% Down
$35,000
15% Down
$52,500
20% Down
$70,000
Examples show down payment amounts only. Closing costs, prepaid expenses, and other cash-to-close requirements are additional. Eligibility and mortgage insurance depend on loan terms.
Not Sure How Much to Put Down?
Compare different down payment scenarios using our conventional mortgage calculator.
INTERACTIVE CONVENTIONAL MORTGAGE CALCULATOR
Calculate Your Conventional Mortgage Payment
Compare down payment options from 3% to 20% or more. Explore how interest rates, property taxes, homeowners insurance, and estimated private mortgage insurance affect your monthly mortgage payment.
Customize Your Home Loan
Adjust the values to explore your purchase.
$50K$1.5M
3%50%
1%15%
$0$30K
$0$12K
Estimated Private Mortgage Insurance
Conventional mortgages with less than 20% down often require PMI. Enter an illustrative annual PMI rate below. The calculator will automatically show $0 borrower-paid PMI when the down payment reaches 20%.
Default 0.50% is an illustration, not a lender quote or guaranteed mortgage insurance premium.
Your Estimated Conventional Mortgage
Illustrative purchase financing breakdown.
Home Purchase Price
$350,000
Down Payment
$10,500
Loan Amount
$339,500
Loan-to-Value Ratio
97%
Estimated Total Monthly Payment
Calculating…
Principal, interest, taxes,
insurance & estimated PMI
Monthly Principal & Interest
Calculating…
Monthly Property Taxes
$350
Monthly Homeowners Insurance
$150
Estimated Monthly PMI
Calculating…
Down Payment Funds
$10,500
Adjust the values to compare conventional down payment and PMI scenarios.
Explore My Conventional Loan Options →Educational estimate only; not a loan quote, approval, or eligibility determination. The selected interest rate and PMI rate are hypothetical. Estimated PMI is calculated using the entered annual rate multiplied by the original loan amount, divided by 12. Actual PMI premiums vary by credit, lender, loan structure, and insurer. PMI may be subject to cancellation requirements. The calculator assumes standard borrower-paid PMI and does not model lender-paid mortgage insurance. Closing costs, HOA dues, and other expenses are excluded. Down payment is not total cash needed at closing.
EXPLORE CONVENTIONAL MORTGAGE PROGRAMS
Conventional Loan Programs With as Little as 3% Down
Conventional financing includes specialized programs that may help qualified homebuyers purchase with smaller down payments. Explore these established program options and their important differences.
Fannie Mae
HomeReady® Mortgage
Fannie Mae HomeReady provides conventional financing designed for qualifying low- and moderate-income homebuyers.
- As little as 3% down for eligible borrowers.
- Generally limited to 80% of area median income.
- Not exclusively for first-time buyers.
- Eligible gifts and other permitted funds may be used.
- Homeownership education may be required.
- Mortgage insurance and lender requirements apply.
Freddie Mac
Home Possible® Mortgage
Freddie Mac Home Possible offers low-down-payment conventional financing for qualifying low- and moderate-income buyers.
- As little as 3% down for eligible borrowers.
- Generally limited to 80% of area median income.
- Not restricted exclusively to first-time buyers.
- Eligible gift funds may help with upfront costs.
- Homebuyer education may be required.
- Mortgage insurance and underwriting rules apply.
97% LTV
Standard 97% LTV Conventional
Fannie Mae’s standard 97% loan-to-value purchase option allows certain first-time homebuyers to explore conventional financing with a 3% down payment.
- Up to 97% loan-to-value financing.
- At least one borrower must be a first-time homebuyer.
- Fixed-rate mortgage requirements apply.
- Homebuyer education may be required.
- PMI generally applies with 3% down.
- Other borrower and property requirements apply.
Housing Finance Agency
HFA Preferred™ Conventional
Fannie Mae HFA Preferred provides conventional financing through participating housing finance agencies and approved lenders, sometimes alongside down payment assistance.
- As little as 3% down may be available.
- May be paired with eligible homebuyer assistance.
- State or local income limits may apply.
- Homebuyer education may be required.
- Property and purchase requirements vary.
- Availability depends on participating agencies.
Program descriptions are educational. Availability through iLoan depends on participating lenders and housing finance agencies. Credit, income, property, mortgage insurance, and underwriting requirements apply. Program guidelines may change.
FLEXIBLE CONVENTIONAL FINANCING
Conventional Loans: 3% Down or 20% Down?
Conventional mortgages offer multiple down payment choices. Explore how different financing strategies may fit your homeownership goals.
Traditional Conventional Mortgage Options
Beyond specialized low-down-payment programs, conventional financing may offer 5%, 10%, 15%, 20%, or larger down payments, with fixed-rate and eligible adjustable-rate options. Available terms depend on borrower, property, and lender requirements.
Buy With Less Money Upfront
Qualifying conventional programs may help eligible buyers purchase a home while preserving more of their savings.
- Lower initial down payment.
- Available through eligible 97% LTV programs.
- Borrower-paid PMI generally applies.
- Program-specific requirements apply.
3% Down on a $350,000 Home
$10,500
More Equity From Day One
A larger down payment may help eligible buyers reduce borrowing costs and avoid borrower-paid PMI.
- Lower initial mortgage balance.
- Generally no borrower-paid PMI.
- Lower principal and interest at the same rate and term.
- Requires more upfront funds.
20% Down on a $350,000 Home
$70,000
Which Down Payment Option Is Right for You?
Compare estimated monthly payments or speak with iLoan about available conventional mortgage programs.
Down payment examples exclude closing costs and prepaid expenses. The 3% option requires eligibility for an applicable program. PMI requirements, interest rates, and loan terms vary. Financing is subject to underwriting and lender approval.
COMPARE MORTGAGE PROGRAMS
Conventional vs. FHA vs. VA Home Loans
Each mortgage program has different advantages, qualification requirements, and costs. Compare the key differences before choosing a financing option.
CONVENTIONAL FINANCING
Conventional Loans
Flexible home financing for eligible buyers with different down payment and property financing needs.
- As little as 3% down through qualifying programs.
- 5%, 10%, 15%, and 20% down options may be available.
- Borrower-paid PMI generally applies below 20% down.
- PMI may be canceled under applicable rules.
- No military eligibility requirement.
- Credit and income standards vary by program.
FHA FINANCING
FHA Loans
Government-insured financing that may provide opportunities for buyers with different credit profiles.
- As little as 3.5% down for qualifying scores of 580+.
- FHA guidelines may permit 500–579 scores with at least 10% down.
- Upfront and annual FHA mortgage insurance generally apply.
- FHA property and loan limit requirements apply.
- Not restricted to first-time homebuyers.
- Individual lenders may require higher credit scores.
VA FINANCING
VA Loans
VA-backed financing for eligible veterans, service members, and certain surviving spouses.
- Potential no-down-payment financing.
- No monthly mortgage insurance.
- VA funding fee may apply unless exempt.
- Military service eligibility requirements apply.
- VA does not set a universal minimum credit score.
- VA entitlement and lender underwriting rules apply.
Which Mortgage Is the Best Choice?
The right program depends on your eligibility, credit profile, down payment, interest rate, mortgage insurance, closing costs, and long-term financial goals. Compare complete loan terms rather than focusing only on the minimum down payment.
FHA HOMEOWNERS — EXPLORE YOUR OPTIONS
Can You Refinance an FHA Loan Into a Conventional Mortgage?
Yes. Eligible FHA homeowners may refinance into conventional financing when they meet applicable credit, income, equity, and underwriting requirements. This may help eliminate FHA mortgage insurance, depending on the new loan structure.
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Refinance With 20% Equity
When an eligible conventional refinance has a loan-to-value ratio of 80% or less, standard borrower-paid PMI generally is not required. This may eliminate the FHA mortgage insurance expense.
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Refinance With Less Than 20% Equity
You don’t necessarily need 20% equity to qualify for conventional refinancing. Eligible borrowers may refinance at higher loan-to-value ratios, although conventional PMI or other insurance-related costs may apply.
Could Refinancing Lower Your Mortgage Insurance Costs?
FHA annual mortgage insurance may last for many years or the full loan term, depending on the loan’s original characteristics and applicable FHA rules. Conventional refinancing may offer a different mortgage insurance structure, but borrowers should compare interest rates, closing costs, monthly payments, and total loan expenses.
Refinancing replaces your existing mortgage and may involve closing costs, new repayment terms, and changes to total interest paid. Mortgage insurance requirements vary by program. Loan approval and savings are not guaranteed.
CONVENTIONAL MORTGAGE ELIGIBILITY
What Are the Requirements for a Conventional Home Loan?
Conventional mortgages offer different financing options, but eligibility depends on your financial profile, selected loan program, property, and lender requirements.
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Credit Score Requirements
Conventional lenders evaluate credit history and applicable credit scores. Some conforming loans may be evaluated through automated underwriting without a universal minimum score, while other programs and lenders impose specific credit requirements.
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Down Payment Options
Certain conventional programs allow as little as 3% down. Eligible buyers may also explore 5%, 10%, 15%, or 20% down. Minimum requirements depend on the program, property, and borrower qualifications.
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Income & Employment
Lenders evaluate stable, qualifying income and repayment ability. Salaried, hourly, self-employed, retirement, and other eligible income sources may be considered under applicable guidelines.
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Debt-to-Income Ratio
Your debt-to-income ratio compares qualifying monthly debt payments with gross monthly income. Acceptable ratios depend on underwriting findings, loan program rules, and lender requirements.
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Eligible Property Types
Conventional financing may be available for qualifying primary residences, second homes, and investment properties. Down payment, occupancy, and property requirements differ by loan purpose.
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Loan Limits & Appraisals
Conforming conventional loans are subject to applicable annual loan limits. Property valuation may involve an appraisal or an eligible alternative under applicable underwriting requirements.
Don’t Assume You Need Perfect Credit or 20% Down
Conventional mortgage eligibility depends on more than one number. Certain programs offer low down payments, and credit requirements vary by lender and underwriting method. An iLoan mortgage professional can help review available options based on your circumstances.
What Documents Do You Need for a Conventional Loan?
Preparing your financial documents can help you get started with the mortgage process. Your lender will determine which documents are required for your situation.
- Recent pay stubs or other qualifying income records.
- W-2 forms and applicable tax returns.
- Self-employment documentation, when applicable.
- Recent bank statements and asset information.
- Identification and information for credit review.
- Existing monthly debt and housing expense information.
- Documentation of eligible gift funds, if applicable.
- Purchase contract and property details once available.
Ready to Explore Your Conventional Loan Options?
Whether you’re a first-time buyer or purchasing your next home, iLoan can help you explore available conventional financing programs and down payments.
3%
Down payment available
through qualifying programs.
20%
Down payment generally
avoids borrower-paid PMI.
Compare program eligibility, estimated payments, mortgage insurance, and financing costs before choosing your next step.
Start My Conventional Pre-Approval → Calculate My Estimated Payment →
Conventional financing is
subject to applicable credit,
income, property, and lender
underwriting requirements.
Low down payment options
may have additional restrictions.
Pre-approval does not guarantee
final mortgage approval.
UNDERSTANDING CONVENTIONAL MORTGAGE COSTS
Conventional Mortgage Insurance & Closing Costs
Conventional loans may offer low down payment financing, but understanding private mortgage insurance, closing expenses, and long-term costs can help you make a more informed decision.
What Is Private Mortgage Insurance?
Private mortgage insurance (PMI) protects the lender if a borrower defaults. Borrower-paid PMI is generally required on standard conventional purchase loans when the down payment is less than 20%. The premium depends on credit, loan-to-value, coverage, and other factors.
20% Down Can Avoid PMI
Eligible conventional homebuyers who put at least 20% down generally do not need borrower-paid PMI. This can reduce monthly housing expenses, although a larger down payment requires more cash upfront.
Request PMI Cancellation at 80% LTV
For many covered conventional mortgages, homeowners may request PMI cancellation when the loan balance reaches 80% of the home’s original value, subject to payment history, property value, and other applicable cancellation requirements.
Automatic PMI Termination at 78% LTV
For many covered mortgages, borrower-paid PMI must generally terminate when the scheduled loan balance reaches 78% of the home’s original value, provided the borrower is current on required payments. Applicable exceptions may apply.
What Other Conventional Mortgage Costs Should You Expect?
In addition to your down payment, purchase expenses may include appraisal or valuation charges, lender fees, title services, recording fees, prepaid interest, property taxes, homeowners insurance, and other applicable closing costs. Your actual Loan Estimate and Closing Disclosure provide transaction-specific figures.
PMI cancellation and termination rules depend on loan type, coverage, payment status, and applicable federal law. The 80% and 78% thresholds generally reference original property value and scheduled amortization rules. Other cancellation opportunities may exist based on property appreciation or loan investor requirements. Contact your mortgage servicer for loan-specific requirements.
Can You Get Help With a Conventional Loan Down Payment?
Eligible conventional homebuyers may be able to use documented gift funds, approved assistance programs, and permitted seller contributions to help manage upfront purchase expenses.
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Eligible Gift Funds
Certain conventional programs permit documented gift funds from eligible donors to help cover down payments or closing costs. Donor eligibility, contribution limits, and documentation requirements depend on the loan program.
02
Homebuyer Grants & Assistance
Qualifying buyers may have access to state, local, or other approved assistance programs. Assistance may take the form of grants, forgivable loans, or repayable second mortgages, depending on program terms.
03
Seller-Paid Closing Costs
Conventional loan guidelines may allow sellers to contribute toward eligible closing costs and prepaid expenses, subject to applicable financing concession limits. Seller credits generally cannot replace the borrower’s required down payment.
Explore Conventional Down Payment Assistance
Review potential homebuyer assistance opportunities or connect with iLoan to explore conventional mortgage financing.
Gift funds, seller contributions, and assistance programs are subject to applicable lender, loan program, property, and documentation requirements. Assistance funding and availability vary. Approval is not guaranteed.
CONVENTIONAL MORTGAGE QUESTIONS ANSWERED
Conventional Home Loan Frequently Asked Questions
Get answers to common questions about conventional mortgage down payments, credit requirements, mortgage insurance, and financing options.
Can I get a conventional loan with only 3% down?
Yes. Certain conventional mortgage programs allow eligible buyers to purchase a home with as little as 3% down.
Examples include qualifying HomeReady, Home Possible, and standard 97% loan-to-value purchase programs. Eligibility requirements vary.
Do conventional loans require 20% down?
No. Conventional mortgages may offer 3%, 5%, 10%, 15%, and 20% down payment options depending on the program and borrower.
Putting 20% down generally avoids borrower-paid PMI on an eligible conventional purchase mortgage.
What credit score is needed for a conventional loan?
Credit requirements depend on the mortgage program, lender, and underwriting method. Some automated conforming loan evaluations do not use a universal minimum credit score, while individual lenders and other programs may establish minimum scores.
Credit history, income, debt obligations, assets, and property eligibility also affect approval.
Are conventional loans only for first-time homebuyers?
No. Conventional mortgages are available to eligible first-time and repeat buyers. Certain specialized 3% down payment programs have additional first-time buyer or income requirements.
Explore our First-Time Homebuyers Guide for additional information.
What is PMI on a conventional mortgage?
Private mortgage insurance helps protect the lender if the borrower defaults. Borrower-paid PMI generally applies to standard conventional purchase loans with less than 20% down.
Actual PMI premiums depend on credit, loan-to-value, mortgage insurance coverage, and other loan characteristics.
Can I remove PMI from my conventional mortgage?
For many covered conventional mortgages, homeowners may request PMI cancellation when the loan balance reaches 80% of the home’s original value, subject to applicable requirements.
Borrower-paid PMI generally terminates automatically when the scheduled balance reaches 78% of the original property value, provided the borrower is current on required payments. Exceptions may apply.
Can I use gift funds for a conventional down payment?
Certain conventional programs allow documented gift funds from eligible donors for down payments or closing costs. Donor eligibility and documentation requirements depend on the selected program.
Buyers may also explore Homebuyer Grants and Assistance where available.
Is a conventional loan better than an FHA loan?
Neither program is automatically better for every borrower. Conventional loans may offer advantages with mortgage insurance cancellation, while FHA loans may provide different credit qualification opportunities.
Compare our FHA Loans guide to understand the differences in down payments, mortgage insurance, and eligibility requirements.
Can I use a conventional loan for a second home or investment property?
Yes. Conventional financing may be available for qualifying primary residences, second homes, and investment properties.
Down payment requirements, interest rates, and underwriting standards vary by occupancy and property type. Explore Investment Property Loans for more information.
Can I refinance an FHA loan into a conventional mortgage?
Yes. Eligible FHA homeowners may refinance into conventional financing if they meet applicable credit, income, equity, and underwriting requirements.
This may eliminate FHA mortgage insurance. Conventional PMI may still apply if the new loan-to-value ratio exceeds 80%. Explore our Rate & Term Refinance guide.
Still Have Questions About Conventional Home Loans?
Connect with iLoan to explore down payment options, mortgage insurance, and available conventional financing programs.
PERSONALIZED CONVENTIONAL MORTGAGE GUIDANCE
Explore Your Conventional Home Loan Options With iLoan
Whether you’re buying your first home, purchasing again, or comparing conventional financing options, connect with iLoan to review available mortgage programs and understand your next steps.
Let’s Find a Mortgage That Fits Your Goals.
Conventional financing offers options for eligible buyers with different credit profiles, down payment resources, and homeownership goals. Our mortgage professionals can help you explore available financing opportunities.
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Explore 3% Down Payment Programs
Review qualifying low down payment options, including eligible conventional mortgage programs.
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Compare 5%, 10%, 15% & 20% Down
Explore different down payment scenarios and how they may affect mortgage costs.
✓
Understand PMI & Closing Costs
Learn how mortgage insurance, interest rates, and closing expenses may affect your financing.
Prefer to speak with us directly?
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Start My Conventional Pre-Approval →
Request Your Conventional Mortgage Consultation
Complete the form below and an iLoan mortgage professional can help you explore available conventional financing options.
Conventional financing is subject
to applicable credit, income,
asset, property, and lender
underwriting requirements.
Down payment programs and
mortgage insurance requirements
vary. Submitting an inquiry
does not constitute a loan
application or guarantee
financing.
