Conventional Loans —
As Low as 3% Down. No FHA Required.
HomeReady and Home One start at 3% down for qualified buyers. Strong credit? Conventional often beats FHA on total cost. Let's run the numbers.
When Conventional Wins — and When It Doesn't.
Most people assume FHA is always the better option for buyers without 20% down. That's not true. With a 680+ credit score and 5% or more to put down, conventional PMI is often cheaper than FHA mortgage insurance — and conventional PMI eventually falls off. FHA MIP doesn't on most loans.
- ✓ Credit score 680 or higher
- ✓ 5%+ down payment available
- ✓ Buying above FHA loan limits
- ✓ Want PMI to eventually drop off
- ✓ Second home or investment purchase
- ✓ Stronger financial profile overall
- ✓ Credit score 580–679
- ✓ Only 3.5% down available
- ✓ Higher debt-to-income ratio
- ✓ Recent credit events or hardship
- ✓ Manual underwrite needed
- ✓ Gift funds covering most of down payment
The only way to know which is right for your situation is to run both scenarios. I do that on every file — no guessing, no assumptions.
HomeReady & Home One — 3% Down Conventional
- ✓ 3% down payment
- ✓ 620+ credit score
- ✓ Income limits apply by area
- ✓ Boarder and rental income allowed
- ✓ Reduced PMI vs standard conventional
- ✓ Homebuyer education required
- ✓ 3% down payment
- ✓ 620+ credit score
- ✓ No income limits for first-time buyers
- ✓ At least one borrower must be first-time buyer
- ✓ Homebuyer education required
- ✓ Strong option for moderate-income buyers
- ✓ 3% down payment
- ✓ 620+ credit score
- ✓ No income limits
- ✓ Both first-time and repeat buyers
- ✓ Standard PMI rates apply
- ✓ Primary residence only
PMI — The Part Most Lenders Don't Explain
Private mortgage insurance is required on conventional loans with less than 20% down. It protects the lender — not you — but it's the cost of access with less than 20% equity.
The key difference between conventional PMI and FHA MIP is that conventional PMI can be canceled. Once you reach 20% equity — through payments, appreciation, or a combination — you can request PMI removal. FHA MIP on most loans taken after 2013 stays for the life of the loan.
For buyers with strong credit and a reasonable down payment, conventional with PMI is often the smarter long-term choice. I'll run both scenarios for your specific numbers so you can decide with real data — not guesswork.
Cancels automatically at 78% LTV. Can request removal at 80% LTV with proof of value.
Stays for the life of the loan on most FHA loans taken after 2013 with less than 10% down.
Some conventional products offer lender-paid PMI in exchange for a slightly higher rate. Ask me if this makes sense for your situation.
Conventional Is Right For You If...
Frequently Asked Questions
What credit score do I need for a conventional loan?
How does conventional compare to FHA for my situation?
Can I use conventional for a second home or investment property?
When does PMI go away on a conventional loan?
Should I call a lender or realtor first?
Serving Louisiana, Mississippi, Florida, Texas & 5 More States
Based in Baton Rouge, Louisiana — serving Denham Springs, Livingston, Gonzales, Walker, Zachary, New Orleans, Shreveport, Lafayette, and Lake Charles. Mississippi: Jackson, Gulfport, Biloxi, Hattiesburg, Mendenhall, Vicksburg. Florida: Tampa, Orlando, Jacksonville, Naples, Boynton Beach, and statewide. Texas: Houston, Dallas, San Antonio, Austin, and statewide.
