What credit score do I need for a conventional loan?

A 620 credit score is a common minimum requirement for many conventional loan programs. However, some lenders and loan programs may accept lower or higher credit scores depending on factors such as down payment, income, assets, and overall financial profile.

Conventional Loans

A Mortgage Option For Every Stage Of Homeownership

Whether you're purchasing your first home, moving up, or buying again, conventional financing offers one of the most common paths to homeownership.

✓ Downpayments as low as 3%

✓ Available for first-time and repeat buyers

✓ Financing for a variety of homeownership goals

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Qualification Comparison Common Questions Apply Now

What Is a Conventional Loan?

What Is A Conventional Loan?

Quick Answer: A conventional loan is a mortgage that follows guidelines established by Fannie Mae and Freddie Mac and is not backed by a government agency such as FHA or VA.

Qualified borrowers may be able to purchase a home with as little as 3% down, and conventional financing can be used for primary residences, second homes, and investment properties.

Conventional loans are commonly used by buyers who:

Have established credit and stable income
Are purchasing their first home or moving to their next one
Want a low down payment option
Are comparing conventional and FHA financing

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CONVENTIONAL LOAN APPROVAL

How Conventional Loan Approval Works

While every borrower is different, lenders typically evaluate several factors when determining eligibility for a conventional loan.

The exact requirements can vary based on the loan program, down payment, property type, and overall financial profile.

Conventional loans often offer

Down payments as low as 3% for qualified borrowers
Financing for primary, second, and investment properties
Potentially lower long-term costs compared to some loan programs
Options for first-time and experienced homebuyers
Mortgage insurance that may be removable in certain situations

What Lenders Review

Lenders evaluate multiple factors when determining whether you qualify for a conventional loan.

Down Payment

Conventional loans may allow qualified borrowers to purchase with as little as 3% down.

Why it mattersYour down payment can impact loan options, mortgage insurance, and monthly payments.

Credit History

Lenders review your overall credit profile when determining eligibility.

Why it mattersCredit history helps lenders evaluate risk and loan qualification.

Income Verification

Borrowers must document sufficient income to support the proposed mortgage payment.

Why it mattersStable income shows lenders you can afford your monthly payment.

Debt-to-Income Ratio

Existing monthly debts are evaluated alongside income to determine affordability.

Why it mattersHelps lenders understand how manageable your monthly payments are.

Assets & Reserves

Lenders may review available assets, savings, and reserve funds during the approval process.

Why it mattersAssets can help demonstrate financial stability and support qualification.

Property Type

Conventional financing may be available for primary residences, second homes, and investment properties.

Why it mattersProperty type can affect loan options, down payment requirements, and qualification guidelines.

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We'll compare conventional, FHA, VA, and other financing solutions to help you choose the path that makes the most sense for your goals.

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CONVENTIONAL VS FHA

Conventional vs FHA: Which Loan Fits Your Situation?

Both conventional and FHA loans can help you become a homeowner, but each is designed for different financial situations. Understanding the key differences can help you determine which option may be the better fit.

Happy homebuyers receiving the keys to their new home after closing on a mortgage.

Feature	FHA Loan	Conventional Loan
Down Payment	As low as 3.5%	As low as 3%*
Credit Requirements	580+ credit score*	Often 620+ credit score
Mortgage Insurance	Required	May be avoidable or removable in certain situations
Debt-to-Income	Higher debt ratios may qualify*	Typically lower debt ratios
Property Eligibility	Primary residence	Primary, second homes, and investment properties
Loan Limits	Subject to FHA county loan limits	Higher conforming loan limits available in many areas

Loan programs, qualification requirements, and available terms vary based on credit profile, income, assets, property type, and lender guidelines.

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FAQ

Conventional Loan FAQs

Answers to common questions borrowers have about conventional financing.

A 620 credit score is a common minimum requirement for many conventional loan programs. However, credit score requirements can vary based on the lender, loan program, down payment, and overall financial profile.

If your down payment is less than 20%, mortgage insurance may be required. Unlike FHA mortgage insurance, conventional mortgage insurance may be removable once certain equity and loan requirements are met.

Yes. Conventional loans are available to both first-time and repeat homebuyers. Many programs are designed to help qualified buyers purchase a home with a lower down payment while still benefiting from conventional financing.

Yes. Conventional loans may be used to finance primary residences, second homes, and certain investment properties. Qualification requirements, down payment amounts, and reserve requirements may vary depending on the property type.

In many cases, yes. Conventional loan guidelines may allow sellers to contribute toward certain closing costs and prepaid expenses. Contribution limits vary based on factors such as down payment amount and loan structure.

Many conventional loan programs allow eligible borrowers to use gift funds from family members and other approved sources toward their down payment and, in some cases, closing costs. Documentation requirements apply.