A conventional loan is a mortgage that isn't insured or guaranteed by the federal government (unlike FHA or VA loans). It's originated under guidelines set by Fannie Mae or Freddie Mac, which is why it's often the fastest, most flexible option for borrowers with good credit and a reasonably stable financial picture.
Who it's for
- Buyers with credit scores and savings strong enough to skip government-backed insurance requirements
- Move-up buyers and repeat homebuyers, not just first-timers
- Anyone who wants to avoid FHA's upfront and ongoing mortgage insurance premiums
- Borrowers purchasing a primary residence, second home, or investment property
Key features
- Down payments as low as 3% for qualified first-time buyers, though 5–20% is common
- Private mortgage insurance (PMI) can typically be removed once you reach ~20% equity
- Fixed and adjustable-rate options, in a range of loan terms
- Generally faster underwriting than government-backed programs
- Competitive pricing for borrowers with strong credit
