Jordan Vreeland
Licensed Mortgage Broker · NMLS #795404
The most widely used loan type in America, and the fastest to close when your file is clean. No upfront MIP, cancellable PMI, and high enough loan limits to cover most of Florida.
The Basics
A conventional loan isn't insured or guaranteed by a federal agency. It's originated by a private lender and sold to Fannie Mae or Freddie Mac on the secondary market. Both are government-sponsored enterprises that standardize the rules lenders follow. This is why conventional loans are called "conforming" when they're within Fannie Mae and Freddie Mac's guidelines.
Because there's no federal insurance cushion, conventional loans hold borrowers to stricter standards: a minimum 620 credit score, documented income, and a manageable debt-to-income ratio. But that strictness comes with real advantages. No upfront mortgage insurance fee. PMI that cancels when you reach 20% equity. And loan limits high enough to cover most Florida markets.
The 2026 conforming loan limit is $806,500 for a single-family home in most Florida counties. If your purchase price is above that, you're in jumbo territory. Below it, conventional is almost always on the table as an option.
Conventional is also the fastest loan type to close when the buyer is prepared. There's no government agency issuing a final commitment. The approval path runs through the lender and Fannie Mae's Desktop Underwriter (DU) automated engine. When the file is clean and documentation is submitted on time, Jordan's team routinely closes conventional loans well ahead of the 30-to-45-day industry average.
We've closed loans in as few as 5 days. Most clients close well ahead of the industry average. The key is running DU upfront, before you make an offer, so there are no underwriting surprises when you go under contract.
Down Payment and PMI
Conventional down payments start at 3% and PMI can be cancelled. Here's how both of those actually work.
Down payment minimums: Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow 3% down for buyers who meet income limits. Standard conventional starts at 5%. Putting down 10% gives you a lower PMI rate. Putting down 20% eliminates PMI entirely.
PMI rates: Private mortgage insurance on conventional loans is priced based on your credit score and down payment. A buyer with a 760 credit score putting down 10% pays a very different PMI rate than a buyer at 640 putting down 5%. We run these numbers for every buyer at pre-approval so you can see the real monthly cost.
PMI cancellation: This is where conventional beats FHA. You can request PMI cancellation the moment your loan balance drops to 80% of the original purchase price, either through payments or through appreciation (with a new appraisal). Lenders are also required by law to cancel PMI automatically when your balance reaches 78% based on the original amortization schedule. No action needed on your part.
We'll calculate your real monthly payment with PMI at your specific credit score and down payment, not a generic estimate.
FHA MIP, by contrast, stays for the life of the loan on most buyers (anyone who puts down less than 10%). That permanent insurance cost is the number-one reason buyers with stronger credit profiles and more than 10% to put down are usually better served by conventional financing. Run the comparison and the savings over 5 to 10 years can be significant.
For the full side-by-side analysis of how the two programs compare in real monthly payment terms, read our guide to FHA vs. conventional loans.
Comparison
Both programs serve a lot of Florida buyers. The right one depends on your credit score, down payment, and what type of property you're buying. Here's the fast version.
| Factor | Conventional | FHA |
|---|---|---|
| Minimum down payment | 3% (with HomeReady/Home Possible) | 3.5% (with 580+ credit score) |
| Minimum credit score | 620 (best rates at 740+) | 580 for 3.5% down; 500 for 10% down |
| Mortgage insurance | PMI required below 20% down; cancellable at 20% equity | MIP required on most loans; stays for life of loan if less than 10% down |
| Upfront insurance fee | None | 1.75% of loan amount (can be rolled in) |
| Loan limits (2026, FL) | Up to $806,500 (conforming) | Varies by county; $524,225 to $563,500 in most Florida markets |
| Property types | Primary, second home, investment | Primary residence only |
For a detailed breakdown of which program wins in specific scenarios, read the full guide to FHA vs. conventional loans.
What You Need to Qualify
There are five main boxes that need to be checked. The stronger your profile on each one, the better your rate and terms.
Minimum 620 to qualify. Rates start improving meaningfully above 680, and the best pricing tiers kick in at 740 and above. If you're at 620, you'll qualify but the rate and PMI cost will be higher than buyers with stronger scores.
As low as 3% with HomeReady or Home Possible. Standard conventional starts at 5%. Each additional 5% you put down reduces your PMI rate and can improve your interest rate. 20% down eliminates PMI entirely.
Most conventional guidelines allow a back-end DTI up to 45%. Some DU approvals allow up to 50% with compensating factors like strong cash reserves. The lower your DTI, the cleaner your approval and the more lenders will compete for your loan.
Two years of employment history is the standard benchmark. W-2 employees, self-employed borrowers, and buyers with multiple income sources all qualify, but the documentation requirements differ. We'll tell you exactly what's needed on your first call.
Must stay within the 2026 conforming limit of $806,500 in most Florida counties. Loans above that threshold move into jumbo territory with different qualifying standards. High-cost designated counties may have higher limits.
Conventional has more flexibility than FHA on property condition. The appraisal still needs to support the purchase price, but the appraiser isn't looking for minimum property standards the way FHA appraisers are. Cosmetic issues generally don't kill a conventional deal.
Is It Right for You?
Conventional is typically the best fit for buyers who have a credit score above 680, can put down at least 5%, and want to avoid permanent mortgage insurance costs. It's also the only option for buyers purchasing a second home or investment property.
If your credit score is below 620, FHA is the better starting point. If your credit is between 620 and 680 and your down payment is below 5%, the comparison between conventional and FHA gets closer, and we'll run both side-by-side for you. Sometimes FHA produces a lower monthly payment in that range. Sometimes it doesn't. The math depends on the specific numbers.
For a more detailed look at the common mistakes that trip up conventional loan applicants, read the top 5 mistakes to avoid when applying for a conventional loan. And for background on the basics, the conventional loan overview covers the full picture.
One path we see working well for buyers in the 680 to 740 score range: get into the home with 10% down on a conventional loan, build equity through payments and appreciation, then refinance to eliminate PMI when you cross the 80% LTV line. It's a more deliberate strategy than just waiting 20 years for PMI to fall off, and with Florida's home value trajectory, the timeline to refinance out of PMI can be shorter than buyers expect.
Common Questions
The minimum is 620. Rates improve meaningfully above 680, and the best pricing tiers start at 740. Below 620, FHA is typically the better path until you build your credit score back up.
As low as 3% with Fannie Mae's HomeReady or Freddie Mac's Home Possible programs. Standard conventional starts at 5%. Each additional increment you put down reduces your PMI rate. 20% eliminates PMI entirely and is the most common target for buyers who want to skip insurance costs.
Yes. You can request cancellation when your loan balance drops to 80% of the original purchase price. If your home appreciates enough to reach 80% LTV, a new appraisal can trigger early cancellation. Lenders must cancel automatically at 78% based on the original amortization schedule. This is a key advantage over FHA loans.
The 2026 conforming loan limit for most Florida counties is $806,500 for a single-family home. Loans above this require jumbo financing with different qualifying standards. A few Florida markets have higher limits due to high-cost area designations, but most buyers fall within the standard limit.
Yes. Conventional loans work for primary residences, second homes, and investment properties. FHA, USDA, and VA loans are restricted to primary residences. For investment properties, conventional typically requires 15% to 25% down and a stronger credit profile than a primary residence purchase.
Individual results may vary. Closing timelines depend on factors including appraisal, title, inspection, and borrower circumstances. 14 Days To Close does not guarantee a specific closing date.
We'll run your numbers, compare conventional and FHA side-by-side if relevant, and tell you exactly what you qualify for, including your real monthly payment with or without PMI.