What Is Conventional Loan?
A mortgage not backed by the federal government, conforming to Fannie Mae or Freddie Mac guidelines.
Definition
A conventional mortgage is the most common loan type, accounting for about 70% of all US home loans. It is not insured or guaranteed by a federal agency. Most conventional loans are conforming, meaning they meet Fannie Mae and Freddie Mac standards (loan limits, credit, DTI). Conventional loans typically need 5% down minimum (3% for first-time buyers via certain programs), credit scores of 620+, and offer better terms than FHA for borrowers with strong credit and 20% down.
Example
Conforming loan limit in 2026 for most US counties: $766,550. Above that, the loan becomes a jumbo.
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Try the Mortgage CalculatorRelated Terms
FHA LoanA government-insured mortgage with low down payment (3.5%) and easier credit requirements.VA LoanA mortgage guaranteed by the Department of Veterans Affairs, available to active military, veterans, and some spouses.LTV (Loan-to-Value Ratio)The loan amount divided by the property's appraised value, expressed as a percentage.