What is a conventional loan?
A conventional loan is a mortgage that is not insured or guaranteed by the federal government, unlike FHA, VA, or USDA loans. Most conventional loans are underwritten to the guidelines established by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation).
Because these loans meet standardized underwriting requirements, lenders can sell them on the secondary mortgage market. That helps keep mortgage money available and allows lenders to offer competitive interestInterest: the cost of borrowing money, charged as a percentage of the outstanding balance and paid in arrears (unlike rent, which is paid in advance). More rates and a wide variety of loan programs.
Conventional vs. Conforming Loans
The terms conventional loan and conforming loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More are often used interchangeably, but they are not exactly the same.
A conforming loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More is a conventional loan that meets Fannie Mae’s or Freddie Mac’s underwriting guidelines, including the maximum loan amount they will purchase.
A jumbo loan is also a conventional loan, but it exceeds the conforming loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More limit or doesn’t meet other agency guidelines. Because jumbo loans carry more risk for lenders, they often have different qualification requirements.
New Hampshire Conforming Loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More Limits (2026)
For 2026, the conforming loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More limit for a one-unit property is:
- $832,750 in Belknap, Carroll, Cheshire, Coös, Grafton, Hillsborough, Merrimack, and Sullivan Counties
- $962,550 in Rockingham and Strafford Counties
Higher conforming loan A conforming loan is a conventional mortgage that meets the requirements to be purchased by Fannie Mae or Freddie Mac. “Conforming” means the loan conforms to their guidelines — on loan amount, credit, documentation, and property type — which allows the lender... More limits apply to two-, three-, and four-unit properties. Loan limits are established annually by the Federal Housing Finance Agency (FHFA) and are subject to change.
Who Can Get a Conventional Loan?
Conventional loans are available to both first-time homebuyers and repeat buyers.
Most standard conventional loan programs do not have income limits. However, some affordable lending programs—such as Fannie Mae HomeReady® and Freddie Mac Home Possible®—do have income limits and additional eligibility requirements.
Types of Conventional Loans
Conventional financing includes many different loan options, including:
- Fixed-rate mortgages
- Adjustable-rate mortgages (ARMs)
- First-time homebuyer programs
- Low down payment loans (as little as 3% down for qualified buyers)
- HomeReady® loans
- Home Possible® loans
- HomeStyle® Renovation loans
- Loans for primary residences, second homes, and investment properties
Is a Conventional Loan Right for You?
Conventional loans are often an excellent choice for borrowers with good credit because they offer competitive interestInterest: the cost of borrowing money, charged as a percentage of the outstanding balance and paid in arrears (unlike rent, which is paid in advance). More rates, flexible loan terms, and a wide range of financing options.
If your down payment is less than 20%, you’ll generally be required to pay private mortgage insurance (PMI). Unlike FHA mortgage insurance, however, PMI on a conventional loan can usually be canceled once you’ve built enough equityEquity is the portion of your home's value that you own. It's calculated by subtracting the balance of your mortgage and any other loans secured by the home from its current market value. Your equity grows in two ways: by paying down... More in your home.
Whether you’re buying your first home, moving up, purchasing a vacation home, or investing in real estate, a conventional loan may be the right financing option. We’ll help you compare your choices and determine which loan best fits your goals.
Conventional Loan Quick Facts
- Minimum credit score: 620 (Bookend Lending guideline)
- Down payment as low as 3%
- Available for primary residences, second homes, and investment properties
- Fixed-rate and adjustable-rate options available
- Loan terms from 10 to 30 years
- PMI required when putting less than 20% down
Minimum Down Payment Requirements
Primary Residence
- 3% down – Single-family homes and condos (qualified borrowers)
- 5% down – Two-unit owner-occupied properties
Second Homes
- 10% down – Single-family homes and condos
- Two- to four-unit properties are considered investment properties.
Investment Properties
- 15% down – Single-family homes and condos
- 25% down – Two- to four-unit properties
Seller paid closing costs also known as “seller concessions”
A seller may agree to pay some or all of a buyer’s eligible closing costsClosing costs are the fees and charges due at closing beyond the down payment itself — the collection of costs that pay for all the work, insurance, and government processes required to originate a loan and transfer (or refinance) a property. They... More and prepaid expenses. These contributions must be negotiated as part of the purchase contract.
Maximum seller concessions generally are:
| Down Payment | Primary Residence / Second Home |
|---|---|
| Less than 10% | 3% |
| 10%–24.99% | 6% |
| 25% or more | 9% |
Investment Property
- Maximum seller contribution: 2%
Keep in mind: Seller contributions can never exceed your actual closing costsClosing costs are the fees and charges due at closing beyond the down payment itself — the collection of costs that pay for all the work, insurance, and government processes required to originate a loan and transfer (or refinance) a property. They... More and prepaid expenses. In many transactions, total closing costsClosing costs are the fees and charges due at closing beyond the down payment itself — the collection of costs that pay for all the work, insurance, and government processes required to originate a loan and transfer (or refinance) a property. They... More are well under 4% of the purchase price.
Qualifying for conventional loans
- Minimum of 620 credit score required by Bookend LendingMortgage Company for conventional loans.
- All conventional loans are run through an automated underwriting system to determine the basic eligibility of the borrower.
- Generally conventional loans allow up to a 38% – 50% debt ratio depending on the borrower profile
- each loan scenario is different depending on down payment, credit score & profile, property type, employment history, etc.
- automated underwriting helps determine the maximum debt ratio for each borrower.
Mortgage Insurance for conventional loans
- mortgage insurance is requied for all loans with less than 20% down
What is the cost of mortgage insurance?
- The cost of mortgage insurance varies by down payment, occupancy, credit score, debt ratio, property type and how you choose to pay the premiums
- Here’s a link to one Mortgage Insurance Company’s site if you want to check out different premiums
- Want a quote specific to you? Just reach out to Renee Duval
What are my choices in mortgage insurance
- mortgage insurance can be paid monthly
- mortgage insurance can be paid in a one time upfront premium (either paid in cash at closingClosing is the meeting — typically in person — where all parties sign the final loan and property paperwork and the transaction becomes official. It’s the last step in the process, the point where months of paperwork, verification, and waiting turn into... More or added to the loan balance)
- mortgage insurance can be rolled into the rate which often results in a lower overall payment
- Renee Duval can provide you a comparison of these options for you to review and determine which is best for you
Conventional rehab & construction loans
We offer a conventional renovation option for primary residences, 2nd home purchases and investor purchases.
Construction loans are available through our broker division or we can refer you to a local lender that offers construction loans.
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