Conventional Loans: Your Complete California Guide
Conventional loans are the most widely used mortgage in California — flexible, competitive, and available for primary residences, second homes, and investment properties. Everything you need to know is below.
What is a conventional loan?
A conventional loan is a mortgage not insured or guaranteed by a government agency. It follows guidelines set by Fannie Mae and Freddie Mac, and is funded by private lenders. Conventional loans are available in standard conforming amounts (up to $832,750) and high-balance amounts for California’s high-cost counties (up to $1,249,125 for a single unit).
All 26 conventional loan topics
What to expect when you apply for a conventional loan
Most conventional files follow the same path, whether you are buying a first home or refinancing a rental:
- Goals and numbers. We talk through price range, down payment, credit, and how long you plan to keep the property.
- Documents. Expect recent pay stubs or tax returns, two months of asset statements, and a photo ID. Self-employed borrowers add business returns.
- Application and Loan Estimate. Under the CFPB TRID rule, the Loan Estimate must reach you within 3 business days of application.
- Underwriting. Your file runs through Desktop Underwriter or Loan Product Advisor, then an underwriter reviews the findings and your documents.
- Appraisal and conditions. The appraisal confirms value; the underwriter may ask for letters of explanation or updated statements.
- Closing Disclosure and signing. The Closing Disclosure must be in your hands at least 3 business days before you close.
Rate locks commonly run 30 to 60 days, so the lock period should match your escrow timeline.
Who the conventional category fits
- Buyers and homeowners with a credit score of roughly 620 or higher and steady, documented income.
- Borrowers who want mortgage insurance that can be removed later rather than carried for the life of the loan.
- People buying a second home or a 1–4 unit rental, which FHA and VA do not allow.
- Loan amounts within the conforming or high-balance limit for the county. Check yours on the loan limits page.
If your score is below 620, or your savings are thin, it is worth comparing against FHA. If your income is hard to document on tax returns, the bank statement option may fit better. Terms vary by program and borrower profile, and we confirm the current guidelines when we review your scenario.
Where to start, by situation
- Saving for a purchase: down payment tiers and combining assistance with a conventional loan
- Working on credit: credit score requirements
- Running a business: self-employed borrowers
- Buying a rental: investment property financing
- Already own: refinancing a conventional loan
- Budgeting the payment: PMI and how to remove it
Frequently asked questions
How do I know whether to start with conventional or something else?
Credit score, down payment, and occupancy are the three quickest filters. A quick review of those numbers usually tells us whether conventional, FHA, VA, or a non-QM program deserves a closer look.
Does a conventional loan require a first-time buyer status?
No. Only the 3% down option for standard 97% loans requires at least one first-time buyer. Repeat buyers can still use conventional financing, typically with 5% or more down; programs such as HomeReady and Home Possible have their own eligibility rules.
Can I use this category for a refinance?
Yes. Rate-and-term and cash-out refinances both fall under conventional guidelines, each with its own loan-to-value limits and seasoning rules covered in the guides above.
Related guides
- Is a conventional loan right for you?
- What a conventional loan is
- Mortgage payment calculator with taxes and PMI
Ready to explore your conventional loan options? Lendia can walk you through what you qualify for and find the right program for your goals.