Conventional Loans
Learn how conventional loans work in Florida
A conventional loan may be a flexible mortgage option for qualified Florida buyers, homeowners, and real estate investors. At Viva Casa Mortgage Solutions, we help you understand how conventional financing works, compare it with government-backed loan options, and choose a path that supports your budget, property goals, and long-term plans.
What Is a Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by a government agency like FHA, VA, or USDA. Instead, conventional loans are offered through private lenders and may follow guidelines from Fannie Mae or Freddie Mac when they are conforming loans.
Conventional loans may be used for different property goals, including primary residences, second homes, and investment properties, depending on borrower qualification, property eligibility, lender guidelines, and loan program requirements.
The reference page from Auctus explains conventional loans as non-government-backed mortgages and highlights common topics such as down payment, eligibility, closing costs, refinancing from FHA to conventional, and conventional versus government-backed loans.
Down Payment Options
Conventional loans do not always require 20% down. Some eligible borrowers may qualify for low down payment conventional options. Fannie Mae describes 97% loan-to-value options designed to support eligible first-time homebuyers and certain refinance transactions, which can mean a down payment as low as 3% for qualified borrowers.
However, a lower down payment may increase the monthly payment and may require private mortgage insurance. The CFPB explains that PMI is typically required on conventional loans when the borrower puts down less than 20%.
Can You Refinance From FHA to Conventional?
In some cases, homeowners may refinance from an FHA loan into a conventional loan. This may be considered when the homeowner wants to review mortgage insurance, loan terms, monthly payment, or long-term financing goals.
Eligibility depends on available equity, credit profile, income, debts, property value, loan-to-value ratio, lender guidelines, and market conditions. It is important to compare the new loan costs against the potential benefits before making a decision.
Closing Costs and Gift Funds
Conventional loans may include closing costs such as lender fees, title fees, appraisal fees, prepaid taxes, insurance, and other transaction-related expenses. Your Loan Estimate will show estimated costs after you apply.
Depending on the loan program and transaction, buyers may be able to use options such as:
- Seller concessions, when allowed by the contract and loan guidelines
- Gift funds, when properly documented and permitted
- Lender credits, which may involve accepting a different interest rate structure
- State, local, or eligible assistance programs, when available
Each option may affect your loan terms, cash needed to close, or monthly payment, so it should be reviewed carefully.
What Is Private Mortgage Insurance?
Private mortgage insurance, or PMI, is insurance that protects the lender if the borrower stops making mortgage payments. PMI is commonly required with a conventional loan when the down payment is less than 20% of the home’s value.
PMI adds to the cost of the loan, so it is important to review how it affects your total monthly payment and long-term mortgage strategy.
Conforming Loan Limits
Some conventional loans are considered conforming loans, which means they meet certain guidelines and loan limits used by Fannie Mae and Freddie Mac. For 2026, FHFA announced that the baseline conforming loan limit for one-unit properties in most of the United States is $832,750. High-cost areas may have different limits.
Because loan limits can change by year and county, Viva Casa Mortgage Solutions can help you review the current limits that may apply to your Florida property.
Why Buyers Consider Conventional Loans
Qualified borrowers may consider a conventional loan because it can offer flexible terms, multiple property-use options, and different down payment structures.
A conventional loan may be worth reviewing if you:
- Have steady income and documented ability to repay
- Have a credit profile that meets program and lender requirements
- Want to compare fixed-rate and adjustable-rate options
- Are purchasing a primary residence, second home, or investment property
- Want to compare conventional financing with FHA, VA, or USDA options
- Want to understand private mortgage insurance, also known as PMI
- Are considering refinancing from an FHA loan into a conventional loan
The right mortgage depends on the full financial picture, not just one feature.
Conventional Loans vs. Government-Backed Loans
Conventional loans are different from FHA, VA, and USDA loans.
Conventional loans are not government-insured and may offer flexibility for qualified borrowers, property types, and occupancy types.
FHA loans may be helpful for borrowers who need more flexible credit or down payment guidelines.
VA loans may be available to eligible Veterans, service members, and qualifying surviving spouses.
USDA loans may help eligible buyers purchasing a primary home in qualifying rural or suburban areas.
There is no one-size-fits-all answer. The better option depends on your credit, income, debts, down payment, property type, occupancy, timeline, and long-term goals.
Conventional Loan FAQs
Are conventional loans only for buyers with 20% down?
No. Some conventional loan options may allow lower down payments for qualified borrowers. However, putting less than 20% down may require PMI and can affect the total monthly payment.
Is a conventional loan backed by the government?
No. Conventional loans are not insured or guaranteed by FHA, VA, or USDA. Some conventional loans may be conforming loans that follow Fannie Mae or Freddie Mac guidelines.
Can I use a conventional loan for an investment property?
Possibly. Conventional loans may be available for primary residences, second homes, and investment properties, depending on borrower qualification, property eligibility, and lender requirements.
What credit score do I need for a conventional loan?
Credit requirements vary by lender, loan program, property type, and borrower profile. Fannie Mae’s 97% LTV options are available for eligible transactions, but qualification depends on full underwriting review, not only the credit score.
Can PMI be removed from a conventional loan?
PMI may be removable when certain equity, payment history, seasoning, and lender or investor requirements are met. The CFPB notes that PMI is not required with a conventional loan when the borrower puts 20% down.
Is conventional better than FHA?
Not always. Conventional may be a strong option for some borrowers, while FHA may be better for others. The right choice depends on credit, down payment, mortgage insurance, property type, pricing, and long-term goals.
Compare Conventional Loan Options With Confidence
A conventional loan can be a flexible mortgage path, but the best decision starts with understanding your numbers.
Viva Casa Mortgage Solutions helps Florida buyers, homeowners, and investors compare loan options with clear guidance, personalized support, and a mortgage plan built around their goals.
Disclaimer
This information is provided for educational purposes only and is not a commitment to lend, guarantee of approval, or offer of specific loan terms. Conventional loan eligibility, rates, payments, PMI, closing costs, loan limits, and program availability are subject to borrower qualification, credit approval, income review, property eligibility, lender guidelines, investor requirements, and market conditions. Not all borrowers or properties will qualify. Consult a licensed mortgage professional for guidance based on your individual situation.