Flexible home financing
Conventional Loans
A conventional mortgage is not insured by a federal government agency. It can be used for primary homes, second homes and investment properties when borrower and property requirements are met.
Conventional at a glance
Understand the role this mortgage can play before comparing the numbers.
Potential advantages
Why a borrower may put Conventional on the shortlist.
- ✓Options for primary homes, second homes and investment properties
- ✓Fixed- and adjustable-rate structures may be available
- ✓Mortgage insurance may be removable after eligibility requirements are met
- ✓Multiple term and down-payment options
Important tradeoffs
What deserves a closer look before choosing it.
- !Qualification standards vary by lender and transaction
- !Mortgage insurance may apply when the down payment is below program thresholds
- !Pricing can be affected by credit, occupancy, property type and loan-to-value ratio
HMCO comparison point
Compare payment, cash to close, mortgage insurance, fees, flexibility and expected time in the loan—not only the advertised rate.
Side-by-side mortgage comparison
See how Conventional differs from nearby options.
These high-level differences help organize the conversation. Your actual Loan Estimates and lender guidelines control the final terms.
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Conventional
Flexible mainstream financing
Alternative
FHA
Government-insured financing
Explore FHA ↗
Alternative
VA
Military home loan benefit
Explore VA ↗
Best-known use
Primary homes, second homes and eligible investment properties
Eligible owner-occupied primary residences
Eligible veterans, service members and certain surviving spouses
Down-payment approach
Low-down-payment options may be available for eligible borrowers
Lower down-payment options may be available for eligible borrowers
No down payment may be required for eligible transactions
Mortgage insurance or fees
Private mortgage insurance may apply and may later be removable
Upfront and annual FHA mortgage insurance generally apply
No monthly private mortgage insurance; a funding fee may apply
Income review
Traditional income, employment, asset and credit documentation
Documented income and ability-to-repay review with FHA guidelines
Documented ability-to-repay review plus current VA eligibility
Property flexibility
Broad occupancy and property flexibility, subject to program rules
Property must meet current FHA eligibility and appraisal standards
Eligible owner-occupied primary residences meeting VA requirements
Rate structures
Fixed- and adjustable-rate options may be available
Fixed- and adjustable-rate options may be available
Fixed- and adjustable-rate options may be available
Standout strength
Broad flexibility without government mortgage insurance
May provide more flexible qualification paths for some borrowers
Potential zero-down financing without monthly private mortgage insurance
Tradeoff to weigh
Pricing and eligibility can be sensitive to credit, equity and property profile
Mortgage insurance and property standards should be weighed carefully
Eligibility, entitlement, occupancy and funding-fee rules apply
Program names describe broad categories. Down-payment, credit, income, asset, property, occupancy, appraisal, insurance, fee and documentation requirements vary by lender and transaction.
It may be worth exploring when
Conventional aligns with the way you will use the property and document the loan.
Borrowers with established credit who want flexible property, term and down-payment choices.
- You understand the product-specific insurance, fee and occupancy rules.
- The expected cash to close and monthly payment fit your broader plan.
- The program remains competitive after comparing available alternatives.
Compare another option when
A different mortgage could improve flexibility, documentation or long-term cost.
Mortgage products solve different constraints. A dedicated MLO can test more than one structure using the same scenario.
Common questions
Conventional loan FAQs.
These answers provide general education and are not a qualification decision, rate quote or commitment to lend.
Is a conventional loan only for first-time buyers?
No. Conventional financing may be used by first-time and repeat buyers, as well as eligible second-home and investment-property borrowers.
Do conventional loans always require 20% down?
No. Some programs permit lower down payments for eligible borrowers, although mortgage insurance and other requirements may apply.
Can mortgage insurance be removed?
In some cases, private mortgage insurance may be canceled after applicable equity, payment-history and investor requirements are satisfied.
Personal comparison
See whether Conventional belongs in your mortgage plan.
HMCO can review available programs using your complete borrower, property and transaction scenario.