A conventional mortgage is not government-insured or government-guaranteed. Conforming loans may follow Fannie Mae or Freddie Mac rules; jumbo and other conventional loans may follow different investors. Conventional and conforming are not synonyms.
Who should compare it
Compare conventional options using the actual lender and underwriting path. Fannie Mae DU removed a fixed minimum score effective November 15, 2025; manual, investor and lender requirements differ. A score, down payment or DTI alone does not establish eligibility or better pricing. Other programs can also finance amounts above conforming limits; VA borrowers with full entitlement have no VA loan-size cap.
Why people choose it over FHA or other government loans
- Covered borrower-paid PMI: On eligible HPA loans secured by a one-unit principal residence, automatic termination generally uses the scheduled 78% of original value when current. A borrower may request cancellation at 80% subject to applicable payment history, junior-lien and value conditions. Lender-paid MI and other programs differ.
- Insurance pricing varies. Conventional PMI may be monthly, upfront, split-premium or lender-paid. No universal FHA-style upfront premium does not mean every conventional loan has no upfront insurance cost.
- Property options: Some conventional programs permit second homes, investment properties or eligible condominiums. Occupancy, project and property requirements depend on the actual program; conventional financing does not guarantee fewer conditions.
Down payment options
Eligible HomeReady and Home Possible transactions may allow 3% down; other conventional programs use their own requirements. Mortgage-insurance arrangements and prices vary. Compare actual insurance, points, rates, costs and remaining debt over your expected holding period instead of assuming conventional financing is always cheaper.
Conforming loan limits, PMI rates, and specific program eligibility change year to year and by county. Confirm current numbers with a licensed loan officer.