Conventional loans
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as FHA, VA or USDA. Many are conforming loans, which meet size limits and rules so they can be bought by Fannie Mae or Freddie Mac.*
What it is
Conventional loans are made by private lenders. A conforming loan stays within the loan limit for its county, which the Federal Housing Finance Agency (FHFA) sets each year. Credit, income, down payment and the property all affect whether a borrower qualifies and on what terms.
Conforming limits and "high-balance" loans
For 2026, FHFA set the baseline one-unit conforming loan limit at $832,750. In some higher-cost counties the limit is higher, up to $1,249,125. Lenders often call a conforming loan that is above the baseline but within the higher limit for its county a "high-balance" loan. That is a lender term, not an FHFA category. Ask your lender for the limit in the county where you are buying. A loan over the limit for its county is a jumbo loan (see the jumbo guide).
Down payment
Fannie Mae says its HomeReady program allows a down payment as low as 3%, and that when every borrower who will live in the home is a first-time buyer, at least one borrower must complete homeownership education. Programs, income limits and property rules vary, so ask a lender which options fit you.
Mortgage insurance
Private mortgage insurance (PMI) may be required with less than 20% down. The CFPB explains that you can ask your servicer to cancel PMI when your balance is scheduled to reach 80% of the home's original value, if you are current, have no second mortgage and the value has not dropped. Your servicer generally must end PMI automatically when the balance is scheduled to reach 78%. FHA and VA loans follow different rules, and the lender may have its own standards.
Questions to ask a lender
- What is the conforming limit in the county where I am buying?
- What are my down payment options, and what mortgage insurance would I pay?
- When and how can the mortgage insurance come off?
- What are the rate, points and closing costs on my Loan Estimate?
Sources
- FHFA: 2026 conforming loan limits
- FHFA: county loan limits
- Fannie Mae: HomeReady mortgage
- CFPB: When can I remove private mortgage insurance (PMI)?
* General information only, not a loan offer, a commitment to lend or advice. Program rules, limits and fees are set by the agencies above and can change. Eligibility, rates and approval depend on credit, income, the property and the lender, and are not assured. This site is not affiliated with or endorsed by Fannie Mae, Freddie Mac or FHFA. Sinjo Thomas, NMLS #2680792, C2 Financial Corporation, NMLS #135622. See disclosures.
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