Conventional Loans in WA, PA, FL & TX | Saffron Premier Mortgage

What Is a Conventional Loan?

A conventional mortgage is any home loan that is not insured or guaranteed by a federal government agency such as the FHA, VA, or USDA. Conventional loans are the most widely used mortgage product in the United States, and they offer considerable flexibility in terms of loan amounts, property types, and borrower profiles.

Conventional loans are typically originated by private lenders — like Saffron Premier Mortgage — and then sold to or guaranteed by Fannie Mae (FNMA) or Freddie Mac (FHLMC), the government-sponsored enterprises (GSEs) that set underwriting guidelines for the majority of conforming conventional loans in the U.S.

Unlike government-backed loans, conventional mortgages do not charge upfront mortgage insurance premiums and allow you to cancel private mortgage insurance (PMI) once you reach 20% equity — something FHA loans do not permit under certain conditions. For borrowers with strong credit and a sufficient down payment, conventional loans typically offer the most competitive rates and lowest total cost of borrowing.

Conventional Loan Features & Benefits

Competitive Rates

Borrowers with strong credit profiles often qualify for the most competitive rates available in the market on conventional loans.

More Property Options

Finance primary residences, second homes, and investment properties with the same product — something FHA and VA loans don't allow.

No Upfront MIP

Unlike FHA loans, conventional loans do not require an upfront mortgage insurance premium, reducing your out-of-pocket costs at closing.

PMI Cancellation

Once your loan-to-value ratio reaches 80%, you can request cancellation of private mortgage insurance, lowering your monthly payment.

Higher Loan Amounts

Jumbo conventional loans are available for loan amounts exceeding conforming limits, with competitive rates for well-qualified borrowers.

Flexible Terms

Choose from a range of loan terms — 10, 15, 20, and 30 years — and fixed or adjustable rates to match your financial goals.

Conventional Loan Requirements

While specific requirements vary depending on the loan program, lender, and your individual profile, general conventional loan eligibility guidelines include:

Requirement	Typical Guideline	Notes
Credit Score	620 minimum	Best rates typically require 740+
Down Payment	3% – 20%+	Below 20% requires PMI
Debt-to-Income Ratio	Up to 45% – 50%	Lower DTI improves approval chances and rate
Employment History	2 years consistent	Self-employed borrowers need 2 years tax returns
Loan Amount	Up to $806,500 (conforming, 2025)	Higher amounts available as jumbo loans
Property Condition	Must meet appraisal standards	Property must be livable and structurally sound
Reserves	2+ months PITI	May vary by transaction

Not sure if you qualify? Our loan officers work with borrowers across a wide range of financial profiles. Contact us for a personalized assessment — no hard credit pull required for an initial estimate.

Conforming vs. Jumbo Conventional Loans

Conventional loans are divided into two categories based on the loan amount relative to conforming loan limits set annually by the Federal Housing Finance Agency (FHFA).

Conforming Conventional Loans

Conforming loans meet the guidelines established by Fannie Mae and Freddie Mac, including the loan amount limits set by FHFA. For 2025, the conforming loan limit for a single-family property in most areas of the United States is $806,500. In certain high-cost areas, higher limits apply. Conforming loans typically offer the most competitive rates and terms because they can be sold to Fannie Mae and Freddie Mac after origination.

Jumbo Conventional Loans

Jumbo loans are conventional mortgages that exceed the conforming loan limit. Because jumbo loans cannot be sold to Fannie Mae or Freddie Mac, they are held by the lender or sold in private secondary markets. Jumbo loans typically require stronger credit profiles, larger down payments, and more financial reserves, but are an important option for borrowers financing higher-value homes. See our Jumbo Loans page for more information.

Fixed-Rate vs. Adjustable-Rate Conventional Loans

Fixed-Rate Mortgages (FRM)

With a fixed-rate mortgage, your interest rate and monthly principal and interest payment remain the same for the life of the loan. Fixed-rate loans provide payment stability and predictability, making them ideal for borrowers who plan to remain in their home long-term or who prefer a consistent payment. The 30-year fixed-rate mortgage is the most popular loan product in the United States.

Adjustable-Rate Mortgages (ARM)

An adjustable-rate mortgage has an interest rate that is fixed for an initial period — commonly 5, 7, or 10 years — and then adjusts periodically based on a benchmark index, subject to caps on how much the rate can change. ARMs often offer lower initial rates than comparable fixed-rate loans, which can reduce your monthly payment during the initial period. ARMs may be a good fit for borrowers who plan to sell or refinance before the initial rate period ends. However, ARMs carry the risk of higher payments if rates rise after the initial fixed period.

Frequently Asked Questions

What credit score do I need for a conventional loan?

Most conventional loan programs require a minimum credit score of 620. However, to qualify for the most competitive rates, borrowers typically need a credit score of 740 or higher. Borrowers with scores between 620 and 739 can still qualify for conventional financing but may receive a higher rate or be required to pay PMI regardless of down payment.

Can I get a conventional loan with less than 20% down?

Yes. Conventional loan programs are available with down payments as low as 3% for first-time homebuyers and 5% for repeat buyers through certain programs. If your down payment is less than 20%, you will typically be required to pay private mortgage insurance (PMI), which is a monthly fee added to your payment. Once you reach 20% equity, you can request PMI cancellation.

How does PMI work, and when can it be removed?

Private mortgage insurance (PMI) protects the lender if you default on your loan. It is typically required when your loan-to-value ratio (LTV) exceeds 80% at the time of origination. PMI is paid monthly and is separate from your homeowner's insurance. Under the Homeowners Protection Act, lenders are required to automatically cancel PMI when your principal balance reaches 78% of the original appraised value. You can also request cancellation when your balance reaches 80% through principal payments or appreciated home value (subject to verification).

What is the difference between a conventional loan and an FHA loan?

The main differences are that FHA loans are insured by the federal government and typically have more flexible credit and down payment requirements, while conventional loans are not government-backed and generally require stronger credit profiles. FHA loans require both an upfront mortgage insurance premium (MIP) and an annual MIP that cannot be removed for the life of the loan in most cases. Conventional loans with PMI allow you to remove PMI once you reach 20% equity, which can result in lower long-term costs for well-qualified borrowers.

Can I use a conventional loan to buy an investment property?

Yes. Conventional loans are available for primary residences, second homes, and investment properties (1–4 units). Investment properties typically require a larger down payment (15–25%) and may come with a slightly higher rate than a comparable owner-occupied loan. FHA and VA loans are limited to owner-occupied primary residences, so conventional financing is often the only option for investment property purchases.

Conventional Loans