Conventional loans: the default for a reason.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. With good credit they usually offer the lowest total cost, and the mortgage insurance goes away once you build equity.
The essentials
- Down payment: as little as 3% for qualifying first-time buyers, 5% otherwise, 20% to avoid mortgage insurance.
- Credit: generally 620 minimum. Pricing improves meaningfully above 740.
- PMI: required under 20% down, but you can ask to remove it at 80% loan-to-value and it ends automatically at 78% based on the original schedule.
- Property types: primary homes, second homes and investment properties.
- 2026 limits in LA County: $832,750 standard and up to $1,249,125 high-balance.
When conventional beats FHA
Credit around 700 or higher, 5% or more down, or a plan to stay long enough that removable PMI matters. If you're borderline, I price both. See FHA loans.
Common questions
Can I buy a home with 3% down in California?
Yes. Conventional programs such as Fannie Mae HomeReady and Freddie Mac Home Possible, plus standard 97% loan-to-value options, allow 3% down for eligible borrowers, many of them first-time buyers.
How do I get rid of PMI?
Request cancellation once your balance reaches 80% of the original value, or reach 20% equity through appreciation and request a new valuation. PMI ends automatically at 78% of the original value.
What credit score do I need for a conventional loan?
Generally 620, though better scores get better pricing.
Every kind of home loan, one straight answer.
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