Conventional loans can have down payments as low as 3% for qualified buyers. However, a down payment of 20% or more is typical to avoid the need for private mortgage insurance (PMI).

Borrowers typically need a higher credit score for a conventional loan than for government-insured loans. The minimum score required can vary by lender, but a score of 620 is commonly the minimum. Higher scores can lead to better interest rates and loan terms.

If you make a down payment of less than 20%, lenders usually require Private Mortgage Insurance (PMI) to protect themselves in case of default. PMI can be removed once equity in the home reaches 20%, either through payments or appreciation.

Conventional loans can be either conforming or non-conforming. Conforming loans adhere to the maximum limits set by Fannie Mae and Freddie Mac, which vary by county and are adjusted annually. Loans that exceed these limits are called jumbo loans and are considered non-conforming. Jumbo loans typically have stricter credit requirements and larger down payments.

Conventional loans can be used for a primary residence, second home, or investment property, offering more flexibility than government-backed loans.