Arizona's Most PopularHome Loan
Lower rates, removable mortgage insurance, and the flexibility to buy your first home, upgrade, or invest.
I Want to Buy a Home
Use a conventional loan to purchase a home with competitive rates and flexible terms.
Select your state to start:
I Want to Refinance
Lower your rate, shorten your term, or access equity with a conventional refinance.
Select your state to start:
Watch & Understand
Educational videos from HUD counselors and independent educators—no lender sales pitches.
Is a conventional home loan right for you?
A HUD-certified housing counselor explains conventional loans, who they're best for, and how they compare to government-backed options.
Video Playlist
3 educational videos
Videos from government counselors and non-lender educators
Lower Long-Term Costs
PMI disappears at 20% equity. FHA mortgage insurance often stays for the life of the loan.
Backed by Fannie & Freddie
Your loan is purchased by government-sponsored enterprises, ensuring stable rates and terms.
Flexible Property Options
Primary homes, second homes, investment properties, condos—more options than government loans.
What Is a Conventional Loan?
A conventional mortgage is a home loan that isn't insured or guaranteed by the federal government. Instead, it's backed by private lenders and typically sold to Fannie Mae or Freddie Mac—two government-sponsored enterprises that keep the mortgage market liquid and rates competitive.
Because conventional loans aren't government-insured, lenders take on more risk—which is why they typically require higher credit scores and larger down payments. But for borrowers who qualify, the tradeoff is worth it: lower long-term costs, removable mortgage insurance, and more flexibility in property types.
Conforming vs. Non-Conforming
Conforming loans meet Fannie Mae/Freddie Mac guidelines and fall within the 2026 limit of $832,750 (up to $1,249,125 in high-cost areas like San Francisco or New York).
Non-conforming loans (like Jumbo loans) exceed these limits or don't meet standard guidelines. They often require larger down payments and may have different terms.
Conventional vs. FHA Loans
The most common question we hear: "Should I go conventional or FHA?" Here's how they compare.
| Feature | Conventional | FHA |
|---|---|---|
| Minimum Down Payment | 3% | 3.5% |
| Credit Score (typical) | 620+ (740+ for best rates) | 580+ (500 with 10% down) |
| Upfront Mortgage Insurance | None | 1.75% of loan amount |
| Monthly Mortgage Insurance | PMI (removable at 20%) | MIP (often for life of loan) |
| Debt-to-Income Ratio | Up to 50% with factors | Up to 57% |
| Property Standards | Flexible | Stricter HUD requirements |
| Investment Properties | Yes | No (primary only) |
| Loan Limits (2026) | $832,750 conforming | $541,287 (floor) |
| Best For | Good credit, long-term savings | Lower credit, smaller down payment |
| Government Backing | No (private + GSEs) | Yes (FHA insured) |
Data from CFPB, Fannie Mae, and HUD
How Conventional Loans Work
From application to closing—here's what to expect.
Pre-Approval
Get pre-approved to know your budget and show sellers you're serious.
Home Search
Find a property within conforming loan limits ($832,750 standard).
Underwriting
Lender verifies income, assets, credit, and property value.
Closing
Sign documents, pay closing costs (2-5% of loan), get keys.
Loan Sold to GSE
Your lender sells the loan to Fannie Mae or Freddie Mac. You keep same terms.
Understanding the Details
When a Conventional Loan Makes Sense
Conventional financing works for many scenarios—but not all. Here's when it shines.
First Home Purchase
Buy your first home with as little as 3% down. Build equity faster than renting.
Move-Up Buyers
Upgrade to a larger home using equity from your current property.
Investment Property
Finance rental properties or vacation homes—not available with FHA/VA/USDA.
Refinancing
Lower your rate, shorten your term, or drop FHA mortgage insurance.
Cash-Out Refinance
Tap home equity for renovations, debt consolidation, or major expenses.
Self-Employed Buyers
More documentation flexibility than some government programs.
Not sure which loan type fits? If your credit is below 620 or you have limited savings, FHA might be a better starting point. We'll tell you honestly.
What You Need to Know First
We believe in transparency. Here's what catches people off guard.
The PMI Trap
Removing PMI isn't automatic at 20%. You must request it, often pay $300-500 for an appraisal, and some lenders require 2 years of on-time payments first. Automatic removal happens at 78% LTV—but that's 22% equity, not 20%.
Credit Score Cliff
Your rate isn't just "good" or "bad"—it's tiered. A 739 score pays more than 740. A 679 pays more than 680. One point can cost thousands over the loan. Check your score before applying and dispute any errors.
The 3% Down Reality
Putting down 3% means higher PMI, slower equity building, and potential underwater risk if home values dip. Run the math: sometimes 5% down saves more long-term than keeping extra cash.
Stricter Standards
Conventional loans have less forgiveness for credit hiccups, higher income documentation requirements, and tighter DTI limits than FHA. If you've been denied, FHA might approve you—and you can refinance to conventional later.
Is Conventional Right for You?
Good fit if:
- Credit score 680+ (ideally 740+)
- Stable income with 2+ years history
- Can document assets clearly
- Want PMI to go away eventually
- Buying primary, second home, or investment
Consider alternatives if:
- Credit below 620
- Recent bankruptcy or foreclosure
- High debt-to-income ratio (45%+)
- Need maximum flexibility on appraisal issues
- Veteran eligible for VA loan (0% down, no PMI)
Our Position
We'd rather lose a deal than put you in the wrong loan. If conventional isn't right for you today, we'll say so—and help you find what is.
Your Rights as a Borrower
Federal law protects you throughout the mortgage process. Know your rights.
Loan Estimate
Within 3 business days of application, you must receive a Loan Estimate showing rates, fees, and monthly payment.
CFPB: Loan Estimate ExplainerNo Steering
Lenders cannot steer you toward loans that benefit them over you. You have the right to shop and compare.
CFPB: Consumer Resources3-Day Review
You have 3 business days to review your Closing Disclosure before signing. Don't be rushed.
CFPB: Closing DisclosureWire Fraud Alert
Never wire closing funds based on email instructions alone. Always call your title company using a verified phone number to confirm wiring details. Scammers intercept emails and steal down payments.
Frequently Asked Questions
Everything you need to know about conventional mortgages
Basics & Eligibility
Down Payment & PMI
Costs & Rates
Refinancing
Comparisons & Decisions
Ready to Explore Your Options?
No pressure, no obligation. Let's have an honest conversation about whether conventional financing is right for your situation.
NMLS #2280851 | Licensed in Arizona | Equal Housing Lender