Conventional Loans: Simple, Flexible Home Financing from the JD.Mortgage Team at PRMG
Conventional loans are home loans that are not backed by the government. They follow rules set by Fannie Mae and Freddie Mac. Many buyers choose conventional loans because they are simple, flexible, and work for many price ranges. The JD.Mortgage team at Paramount Residential Mortgage Group, Inc. (PRMG), led by J.D. Peck, helps you compare options so you can pick what fits your budget today and tomorrow. See our loan options.
What Makes a Conventional Loan Different?
A conventional loan can be either “conforming” (within set loan limits) or “jumbo” (above those limits). With a qualifying credit score, steady income, and a reasonable debt load, many buyers can get started with as little as 3% down. Because this type of loan isn’t insured by a federal agency, guidelines focus on your credit, income, and property. Our job is to make that clear and easy. Back to top.
Why Many Buyers Choose Conventional Loans
Conventional loans can help you keep costs down over time. Private mortgage insurance (PMI) can be removed later, which can lower your payment. Interest rates are competitive, especially for strong credit profiles. And conventional loans work for many property types, including single-family homes, condos, and some 2–4 unit homes. Try our mortgage calculator.
Conventional Loans and PMI (Private Mortgage Insurance)
If you put less than 20% down, most conventional loans require PMI. PMI protects the lender, but it’s temporary on many loans. Once you reach the right equity level, PMI can be removed. This is a big reason people like conventional loans—they can plan for lower payments later. Learn about PMI from Fannie Mae.
2025 Conforming Loan Limits: What You Can Borrow
Each year, the baseline limit for conforming loans gets updated. For 2025, most areas have a higher limit than 2024. This helps more buyers stay in “conforming” territory instead of going jumbo. If you’re near the line, we’ll check your county’s exact limit for you. See FHFA loan limits.
Down Payment Options (Including 3% Down)
Many first-time buyers can use 3% down options. There are also programs like HomeReady® and Home Possible® for income-qualified buyers. If you have more to put down, we’ll show you how that can reduce your payment or shorten PMI time. Explore HomeReady.
Credit Score and Debt-to-Income (DTI): Clear and Simple
Most conventional loans look for a minimum 620 credit score. Lower debts compared to income usually help you qualify for more. If your file is unique, our team will guide you on what moves the needle most. See our mortgage process.
Fixed vs. Adjustable Rate (ARM)
Fixed-rate loans keep the same rate for the life of the loan. ARMs start with a fixed period and then can adjust. Fixed gives payment stability. ARMs can offer a lower starting rate. We’ll compare the total cost and help you decide. Back to top.
Conforming vs. Jumbo Conventional Loans
Conforming loans fit within FHFA limits and follow standard rules. Jumbo loans are larger and need stronger credit, reserves, and documentation. We handle both. We’ll show you where your price point lands and how to keep costs controlled. Learn about jumbo loans.
Conventional Loans for Different Property Types
Conventional loans work on many property types: single-family homes, condos, planned unit developments (PUDs), and some manufactured homes. They can also work for 2–4 unit properties if you plan to live in one unit. We’ll explain down payment and reserve needs for each. See Fannie Mae eligibility matrix.
How Appraisals and Seller Credits Work
The home must appraise to support the value. If the appraisal comes in low, we’ll talk through options like a price change, seller credit, or a second look at comps. Seller credits can help pay closing costs within allowed limits, which change by down payment and occupancy. Read Fannie Mae IPC rules.
Removing PMI Later
On many conventional loans, PMI can be removed when you reach the right equity level, or at a certain point in the loan’s schedule. We’ll map out the likely timeline so you know when that drop could happen. Freddie Mac MI cancellation.
Conventional vs. FHA: When Each Makes Sense
FHA can be great for lower credit scores or smaller savings. But FHA mortgage insurance lasts longer. Conventional shines when your credit is stronger, you’re borrowing near the FHA limit, or you want PMI that can end. We’ll compare both side-by-side. Compare our FHA page.
Second Homes and Investment Properties
Conventional loans allow second homes and investment properties with different down payment and reserve rules. If you plan to rent part of the home or buy an investment, we’ll review what meets today’s guidelines. See alternative (Non-QM) options, too.
Can You Use Gift Funds?
Yes, gifts from allowed donors can help with your down payment and closing costs on many primary or second home purchases. We’ll give you a simple gift letter and tell you what proof the underwriter will need. Gift funds policy.
Closing Costs and Ways to Reduce Them
Closing costs can include lender fees, title fees, escrow, taxes, and insurance. You can use seller credits (within limits), pick a slightly higher rate to get a lender credit, or bring cash. We’ll price each path so you see the trade-offs. Estimate costs with our calculator.
Pre-Approval: Know Your Number
We build a strong pre-approval so you can shop with confidence. A better pre-approval can help your offer stand out. The JD.Mortgage team at PRMG will explain conditions up front so you’re not surprised later. Contact the JD.Mortgage team.
What Makes Our Process Different
Our advice is clear and direct. We show you simple side-by-side choices, explain PMI timing, map out cash to close, and help you plan for what’s next. We serve 49 states (excluding New York). We keep your file moving and communicate the “why” behind each request. Back to top.
Top 25 Conventional Loan FAQs (Past 90 Days)
1) What is a conventional loan?
It’s a mortgage not backed by the government. It follows rules set by Fannie Mae and Freddie Mac. See loan options.
2) What credit score do I need?
Many lenders look for at least 620 however in recent years, FNMA has began allowing a blended score among all borrowers on the loan. Higher scores can help you qualify for better pricing. How we qualify.
3) What is the minimum down payment?
As low as 3% for many first-time buyers who qualify. We’ll confirm which option fits you. 3% down overview.
4) Do I need PMI with less than 20% down?
Yes, most loans under 20% down require PMI, but it can often be removed later. PMI basics.
5) When can PMI be removed?
When you hit the right equity level or at a set point in the loan. We’ll show your path. Freddie MI cancellation.
6) What are the 2025 conforming loan limits?
Most areas have a baseline of $806,500 for one-unit homes, with higher limits in some areas. Check FHFA limits.
7) What debt-to-income (DTI) ratio do I need?
Guidelines vary, but lower DTI helps. We’ll run your file and show what fits now. Run scenarios.
8) Is a conventional loan better than FHA?
It depends. Conventional may win if you have stronger credit or want PMI that can end. FHA may help if credit is lower. Compare FHA.
9) Can I buy a condo with a conventional loan?
Yes, if the condo meets eligibility rules. We’ll check the project and budget. Back to top.
10) Can I use a conventional loan for 2–4 unit homes?
Yes, if you live in one unit. Down payment and reserves differ. We’ll guide you. Learn about 5% down options.
11) Are conventional loans assumable?
Usually no. Most fixed-rate conventional loans have a due-on-sale clause. See Fannie Mae guidance.
12) Can I use gift funds?
Often yes, from allowed donors, with a simple gift letter and proof. Gift rules.
13) Can I get seller credits?
Yes, within set limits based on down payment and occupancy (for example, 3%, 6%, or 9% tiers). IPC limits.
14) How do rate buydowns work on conventional loans?
You can use points to lower your rate. Sometimes sellers can help within IPC rules. Ask us for a quote.
15) Can I pay off PMI early?
If you reach enough equity, you can request removal, subject to rules. More on MI removal.
16) What counts as a first-time buyer?
Usually someone who hasn’t owned a home in the past three years. We’ll confirm for you. Back to top.
17) What loan terms can I choose?
Common terms are 30-year and 15-year fixed, plus ARMs. We’ll show payment impacts. Compare payments.
18) Can I refinance a conventional loan?
Yes. You can refinance to lower your payment, drop PMI, or change your term. See our refinance page.
19) Are there income limits?
Standard conventional loans do not have income caps. Some 3%-down programs do. HomeReady income limits.
20) Can I use a conventional loan for a second home?
Yes. Rules differ from primary homes. We’ll show exact down payment and reserve needs. Back to top.
21) What documents will I need?
Pay stubs, W-2s or tax returns, bank statements, and ID are common. We’ll give you a simple checklist. Request your checklist.
22) What if my appraisal comes in low?
We help you review comps and options like price changes or credits within rules. Learn how we help.
23) What closing costs should I expect?
Plan for lender, title, escrow, taxes, and insurance. We’ll price options to reduce cash to close. Estimate costs.
24) How fast can I close?
It depends on your file and the property. A complete file helps us move quickly. Contact our team.
25) Who will guide me?
J.D. Peck and the JD.Mortgage team at PRMG will guide you from first call to closing. We keep it simple and clear. Back to top.
Work with J.D. Peck and the JD.Mortgage Team at PRMG
You deserve a clear plan, not confusing jargon. We’ll show you simple choices, map PMI timing, and explain cash to close in plain language. Whether you’re buying, refinancing, or planning for a second home, we’re here to help across 49 states (excluding New York). Connect with the JD.Mortgage team.
Explore Related Loan Types
Not sure conventional loans are the best fit? We also help with VA, FHA, USDA, Down Payment Assistance (DPA), investment property financing, Non-QM (DSCR, Bank Statement, ITIN), HELOCs, second mortgages, reverse mortgages, and construction loans. We’ll match the loan to your goals.
VA (no min credit score) •
FHA •
USDA •
DPA & Loan Options •
Non-QM (DSCR, Bank Statement, ITIN) •
HELOCs •
Second Mortgages •
Refinance •
Construction Loans. Back to top.