Conventional Loans
Flexible, Affordable Home Financing for Today’s Buyers
Conventional loans are the most common type of mortgage in the U.S. — and for good reason. They offer competitive interest rates, low down payment options, and flexible terms for a wide range of borrowers. Whether you're a first-time buyer, upgrading to your next home, or purchasing an investment property, conventional financing provides the versatility many homeowners need.
What Is a Conventional Loan?
A conventional loan is a mortgage not insured by a government agency (like FHA or VA). Instead, it follows guidelines set by Fannie Mae and Freddie Mac, giving borrowers access to strong rates, flexible terms, and multiple property types — including primary homes, second homes, and investment properties.
Conventional loans are available as fixed-rate or adjustable-rate mortgages and can be used for both purchases and refinances.
Key Features of Conventional Loans
Expanded from the features listed on the Oasis Mortgage page oasismortgagellc.com
- Down payments as low as 3%–5% for primary residences
- Minimum credit score: 620
- Fixed or adjustable-rate options
- Mortgage insurance is not for the life of the loan
- Options available with no mortgage insurance
- Second home and investment property financing available
- You can have more than one conventional loan
Conventional Loan Requirements
Credit & Income
- Minimum credit score: 620
- Stable income and employment history
- Debt-to-income (DTI) ratio typically capped around 45% (higher possible with strong compensating factors)
Down Payment & Assets
- 3%–5% minimum down payment for primary residences
- 10%+ for second homes
- 15%–25% for investment properties
- Gift funds allowed (varies by occupancy and LTV)
Property Types
- Single-family homes
- Condos and townhomes
- 2–4 unit properties
- Second homes
- Investment properties
Mortgage Insurance
- Required if putting less than 20% down
- Can be removed once you reach 20% equity
- Lower MI costs than FHA for many borrowers
Who Conventional Loans Are Best For
Conventional loans are ideal for:
- Buyers with good to excellent credit
- Borrowers with stable income and assets
- Homeowners who want mortgage insurance removed later
- Buyers purchasing second homes or investment properties
- Borrowers who want flexible loan terms
- Anyone comparing FHA vs. Conventional and wants long-term cost savings
Pros & Cons of Conventional Loans
Pros
- Low down payment options
- Mortgage insurance can be removed
- Competitive interest rates
- Available for second homes and investment properties
- Flexible loan terms (fixed or adjustable)
- No upfront mortgage insurance premium
Cons
- Higher credit score requirements than FHA
- Higher DTI restrictions
- Mortgage insurance required under 20% down
- Rates may be higher for lower credit scores
Conventional Loan FAQs
1. What’s the minimum down payment for a conventional loan?
As low as 3%–5% for primary residences.
2. Can mortgage insurance be removed?
Yes. Once you reach 20% equity, you can request removal — unlike FHA, where
MIP is typically permanent.
3. Are conventional loans only for buyers with perfect credit?
No. While they reward higher credit scores, many borrowers qualify with scores
in the 620–680 range.
4. Can I use a conventional loan for an investment property?
Yes. Conventional loans allow second homes and investment properties, unlike
FHA or VA.
5. Are adjustable-rate mortgages (ARMs) available?
Yes. Conventional loans offer both fixed-rate and ARM options.
6. Can I have more than one conventional loan?
Yes. You can hold multiple conventional mortgages at the same time.
Start Your Conventional Loan Application
Whether you're buying your first home, upgrading, or investing, a conventional loan offers the flexibility and long-term advantages many borrowers prefer.
Call (850) 250-0865 or start your application today.
Oasis Mortgage is here to help you move forward with confidence.