Loan Program
Conventional Loans
The classic path to homeownership.
Overview
Backed by Fannie Mae or Freddie Mac, conventional loans offer competitive rates, flexible terms, and the ability to drop PMI once you reach 20% equity.
Benefits
- As little as 3% down for qualifying first-time buyers
- PMI removable at 20% equity
- Loan terms from 10 to 30 years
- Great for strong-credit borrowers
Typical Requirements
- 620+ FICO score (higher for best rates)
- Debt-to-income ratio typically under 45%
- Verifiable income and employment history
Who this is for
Buyers and homeowners with reasonably established credit and documentable income who want a conforming loan sold to Fannie Mae or Freddie Mac, for a primary home, second home or investment property.
How it works
- Conventional loans are not government-insured. They follow the Fannie Mae Selling Guide or the Freddie Mac Seller/Servicer Guide, plus any additional lender overlays.
- Loan amounts at or below the FHFA conforming loan limit for the county are considered conforming; larger amounts move into jumbo financing.
- Private mortgage insurance generally applies below 20% down and can typically be removed as equity builds, unlike FHA mortgage insurance on most loans.
Eligibility & considerations
| Requirement | What it generally means | Important considerations | Primary source |
|---|---|---|---|
| Program guidelines | Underwritten to Fannie Mae or Freddie Mac guidelines. | Lenders may add overlays that are stricter than the agency guide. | Fannie Mae |
| Loan amount | Must be within the FHFA conforming limit for the county. | Limits are published annually and differ by county and unit count. | FHFA |
| Mortgage insurance | PMI generally applies when the down payment is under 20%. | PMI can usually be cancelled as equity builds, subject to servicer rules. | Freddie Mac |
| Occupancy | Primary, second-home and investment occupancy are all possible. | Down payment and pricing differ significantly by occupancy type. | Fannie Mae |
| Property type | Single family, condo, townhome and small multi-unit properties. | Florida condo projects face additional project-eligibility review. | Fannie Mae |
Requirements vary by loan program and lender, guidelines can change, and additional lender overlays may apply. Contact NexGen Capital for an individualized assessment.
Documentation you may need
- • Recent pay stubs and W-2s, or business and personal tax returns for self-employed income
- • Bank and asset statements to source the down payment and reserves
- • Photo ID, purchase contract and, where applicable, gift-letter documentation
- • Appraisal ordered by the lender
Important limitations
- • Credit, reserve and down-payment expectations are set by the agency guides and by lender overlays, not by a single published minimum.
- • Condo and investment-property financing carry additional project and pricing requirements.
- • Loan amounts above the county conforming limit are not eligible and must be structured as jumbo financing.
Common questions
- Is a conventional loan better than FHA?
- It depends on credit profile, down payment and mortgage-insurance cost. Conventional PMI can be removed as equity builds, while FHA mortgage insurance often remains for the life of the loan.
- How much do I need to put down?
- There is no single answer. Agency guidelines allow low-down-payment options, and pricing, mortgage insurance and lender overlays all change with the amount you put down.
- Can I buy a rental property with a conventional loan?
- Yes. Investment-property financing is available under agency guidelines, with different down payment, reserve and pricing expectations than a primary residence.
Guides for conventional loans
- FHA vs conventional loans compared
- What credit score do I need for a mortgage?
- PMI vs MIP: how mortgage insurance works
You can also estimate a monthly payment with our mortgage calculators or read answers to common Florida mortgage questions.
Sources
Agency guidelines below govern this program at a national level. Lender overlays, Florida property requirements and your own credit profile all affect eligibility — confirm details with a licensed NexGen Capital advisor.
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