Conventional Loans
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. Most follow Fannie Mae or Freddie Mac guidelines. For California buyers with solid credit, they are often the most flexible and lowest-cost way to buy or refinance a primary home, second home or investment property.
Key Takeaways
- Most conventional loans need a 620 credit score; down payments start at 3% on some programs, and 20% down avoids private mortgage insurance (PMI).
- For 2026, the baseline conforming limit is $832,750 and the high-cost ceiling is $1,249,125. Loans above your county limit are jumbo loans.
- Unlike FHA mortgage insurance, PMI can be removed once you build enough equity.
- Conventional is the main choice for second homes and investment properties.
What is a conventional loan?
A conventional loan is made by a private lender and is not backed by the FHA or VA. Most are “conforming,” meaning they meet Fannie Mae or Freddie Mac rules and stay within the county loan limit. This is the largest category of home loans in the country, and it comes in fixed-rate and adjustable-rate versions with several term lengths. For a plain-language definition, see what is a conventional loan.
Conforming, high-balance and jumbo: what is the difference?
| Type | 2026 loan amount (1-unit) | Notes |
|---|---|---|
| Conforming | Up to $832,750 | Baseline limit that applies in lower-cost counties |
| High-balance | $832,751 up to $1,249,125, depending on county | Still a conventional loan, with slightly different pricing and guidelines |
| Jumbo | Above your county limit | Not eligible for Fannie Mae or Freddie Mac; see jumbo loans |
Orange County, Los Angeles and the San Francisco Bay Area are at the ceiling. Other counties fall in between. Read conventional loan limits in California for how the limit is set, and use our loan limit lookup to find your county. The conforming vs. high-balance guide covers the pricing differences.
Who is a conventional loan a good fit for?
- Buyers with good credit who want to keep long-term costs down.
- Buyers putting 5% or more down who want mortgage insurance that can come off later.
- Second-home and investment buyers, who cannot use FHA or VA. See conventional loans for investment property.
- Self-employed borrowers with two years of documented income. See conventional loans for the self-employed.
If your credit is rebuilding, FHA loans may be easier to qualify for. If you served in the military, check VA loans first.
Explore this chapter
- The benefits of a conventional loan: where this loan type shines.
- The cons of a conventional loan: the real trade-offs.
- Conventional loans and mortgage insurance: how PMI works and how to remove it.
- Is a conventional loan right for you?: a decision framework with scenarios.
- Conventional loan limits in California: conforming, high-balance and jumbo thresholds.
- Conventional loan down payment options: 3%, 5%, 10% and 20% compared.
- Conventional loan requirements: credit, debt-to-income, documents and reserves.
Which program pages go deeper?
- Credit score for a conventional loan
- PMI and when you can remove it
- HomeReady and Home Possible for low down payments
- Loan terms from 15 to 30 years
- All conventional loan topics
At Lendia, we compare your options
At Lendia, we compare options from multiple lenders so you can see conventional, FHA and VA side by side before you decide. A Licensed Lendia California Loan Officer will walk through your credit, down payment and goals. Contact us or get a rate quote now.
Frequently Asked Questions
What credit score do I need for a conventional loan?
Most conventional loans require at least a 620 score. A higher score generally lowers your rate and your PMI cost.
Can I get a conventional loan with less than 20% down?
Yes. Some programs allow as little as 3% down. You will generally pay PMI until you build enough equity.
Is a conventional loan the same as a conforming loan?
Not exactly. A conforming loan is a conventional loan within the county limit. A conventional loan above that limit is a jumbo loan.
Can I use a conventional loan for a second home or rental?
Yes. Expect a larger down payment than for a primary home, often around 10% for a second home and 15% to 25% for an investment property.
Are conventional loans assumable?
Generally not. FHA and VA loans can be assumed with approval.
Talk to a Licensed Lendia California Loan Officer
At Lendia, we review your situation and show you the programs you qualify for.