Do I need 20% down for a conventional loan?

No. Conventional financing is available with less, subject to program and lender requirements, but below 20% equity you should expect mortgage insurance. The trade-off to weigh is the smaller down payment against the higher monthly cost until the insurance can be removed.

What is the conforming loan limit?

It is the maximum loan amount for a conventional loan to be eligible for purchase by Fannie Mae or Freddie Mac. It is set annually by the Federal Housing Finance Agency and varies by county and unit count, so the current figure for your county should be checked against the FHFA's published limits rather than taken from any article.

Can mortgage insurance be removed?

Conventional mortgage insurance can generally be removed once you reach the required equity position, subject to the guidelines and your servicer's process. The specific thresholds and the steps involved depend on the loan and the servicer.

Loan option

Conventional loans

A conventional loan is a mortgage that is not insured or guaranteed by a government agency. Most conventional lending follows Fannie Mae or Freddie Mac guidelines, which is why the requirements are relatively consistent from lender to lender.

Last updated 26 October 2026

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How it works

How conventional loans work

Conventional loans that fall within the applicable conforming limit are generally underwritten to Fannie Mae or Freddie Mac guidelines and sold into the secondary market. That is what makes the core requirements fairly predictable: the guidelines are published, and most lenders work from them.

A down payment below 20% normally requires private mortgage insurance. Unlike some government programs, conventional mortgage insurance is typically removable once you reach the equity threshold the guidelines and your servicer require, which is one of the main reasons buyers compare conventional against FHA.

Conforming limits change annually and vary by county and by the number of units, so a loan that is conventional and conforming in one county may exceed the limit in another. A loan above the applicable limit becomes a jumbo loan with different requirements.

Self-employed borrowers are explicitly contemplated by conventional guidelines, which set out how to calculate income from personal and business tax returns. It is worth testing this path before assuming alternative documentation is necessary.

What to weigh up

Lenders may apply overlays that are stricter than the published guidelines, so two lenders can reach different conclusions on the same file.
Occupancy matters: primary residence, second home and investment property are underwritten and priced differently.
Guidelines are updated regularly. Anything you were told a year ago should be re-checked.

Set by the lender, not by us

These vary between lenders and change over time. Nothing on this page is a quote, an approval, or a commitment to lend.

Minimum credit score, maximum debt-to-income ratio and reserve requirements
Overlays above the agency guidelines
Mortgage insurance provider, structure and cost
Maximum number of financed properties for investment files

Nothing on this page is a rate quote, an approval, or a commitment to lend. Figures and requirements change, and they depend on your file.

FHA compared with conventional

These are the two programs most Florida buyers end up choosing between. The differences that matter are mortgage insurance, how the property is assessed, and what happens to your monthly cost over time.

FHA compared with conventional
Factor	FHA	Conventional
Who stands behind it	Insured by the Federal Housing Administration, part of HUD. The loan itself comes from an FHA-approved lender.	Not government-insured. Most conventional lending follows Fannie Mae or Freddie Mac guidelines.
Mortgage insurance	A premium at closing plus an annual premium paid monthly. How long the annual premium lasts depends on the loan-to-value at origination and the rules in effect when the loan is made.	Private mortgage insurance below 20% equity, generally removable once you reach the equity position the guidelines and your servicer require.
Credit profile	Designed to accommodate a wider range of credit profiles. Lenders commonly set a higher floor than FHA itself requires.	Generally expects a more established credit profile, assessed against published guidelines.
Property condition	An FHA appraisal applies condition standards. Repairs may have to be completed before closing.	The appraisal is focused on value. Condition standards are less prescriptive.
Condominiums	The project generally has to be FHA-approved, and not all Florida projects are.	The project has to meet agency project standards, which a wider set of Florida projects satisfy.
Occupancy	Owner-occupied primary residences only.	Primary residence, second home or investment property.
Loan amount ceiling	County limits published by HUD, updated periodically.	County conforming limits published by the FHFA. Above that the loan becomes a jumbo loan with different requirements.

Who stands behind it

FHA: Insured by the Federal Housing Administration, part of HUD. The loan itself comes from an FHA-approved lender.
Conventional: Not government-insured. Most conventional lending follows Fannie Mae or Freddie Mac guidelines.

Mortgage insurance

FHA: A premium at closing plus an annual premium paid monthly. How long the annual premium lasts depends on the loan-to-value at origination and the rules in effect when the loan is made.
Conventional: Private mortgage insurance below 20% equity, generally removable once you reach the equity position the guidelines and your servicer require.

Credit profile

FHA: Designed to accommodate a wider range of credit profiles. Lenders commonly set a higher floor than FHA itself requires.
Conventional: Generally expects a more established credit profile, assessed against published guidelines.

Property condition

FHA: An FHA appraisal applies condition standards. Repairs may have to be completed before closing.
Conventional: The appraisal is focused on value. Condition standards are less prescriptive.

Condominiums

FHA: The project generally has to be FHA-approved, and not all Florida projects are.
Conventional: The project has to meet agency project standards, which a wider set of Florida projects satisfy.

Occupancy

FHA: Owner-occupied primary residences only.
Conventional: Primary residence, second home or investment property.

Loan amount ceiling

FHA: County limits published by HUD, updated periodically.
Conventional: County conforming limits published by the FHFA. Above that the loan becomes a jumbo loan with different requirements.

Which costs less depends on your credit profile, your down payment, and how long you keep the loan — a lower payment now can cost more over ten years if the mortgage insurance never comes off. The comparison worth making is total cost over the period you expect to hold the loan, run on your actual file.

Terms used on this page

Conforming loan limit: The maximum loan amount eligible for purchase by Fannie Mae or Freddie Mac. The Federal Housing Finance Agency sets it annually, and it varies by county and by number of units.A loan above the applicable limit becomes a jumbo loan, underwritten to the lender's own standards.
Mortgage insurance: Insurance protecting the lender, not the borrower, where the down payment or equity is below a program's threshold.Conventional private mortgage insurance can generally be removed once you reach the required equity. FHA annual premiums work differently and may last the life of the loan depending on the loan-to-value at origination. They are not the same product and should not be compared as though they were.
Loan-to-value (LTV): The loan amount expressed as a percentage of the property's value. A larger down payment means a lower LTV.
Debt-to-income ratio (DTI): Your monthly debt obligations measured against your gross monthly income. Lenders use it to assess capacity to repay.

See the full mortgage glossary

Questions about this program

Do I need 20% down for a conventional loan?: No. Conventional financing is available with less, subject to program and lender requirements, but below 20% equity you should expect mortgage insurance. The trade-off to weigh is the smaller down payment against the higher monthly cost until the insurance can be removed.
What is the conforming loan limit?: It is the maximum loan amount for a conventional loan to be eligible for purchase by Fannie Mae or Freddie Mac. It is set annually by the Federal Housing Finance Agency and varies by county and unit count, so the current figure for your county should be checked against the FHFA's published limits rather than taken from any article.
Can mortgage insurance be removed?: Conventional mortgage insurance can generally be removed once you reach the required equity position, subject to the guidelines and your servicer's process. The specific thresholds and the steps involved depend on the loan and the servicer.

Official sources

Program rules are set by these organizations and are updated periodically. Where this page and an official source disagree, the official source is correct.

Current conforming loan limits (opens in a new tab) — Federal Housing Finance Agency
Selling Guide (opens in a new tab) — Fannie Mae
Single-Family Seller/Servicer Guide (opens in a new tab) — Freddie Mac
Explore loan options (opens in a new tab) — Consumer Financial Protection Bureau

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