A conventional home loan refers to a mortgage that is not insured or guaranteed by a government agency such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the Rural Housing Service (RHS). Instead, conventional loans are offered by private lenders like banks, credit unions, and mortgage companies.

Key characteristics of conventional home loans include:

  1. Down Payment: Typically, conventional loans require a higher down payment compared to government-insured loans. The exact amount can vary, but it often ranges from 3% to 20% of the home’s purchase price.

  2. Credit Requirements: Borrowers usually need a good credit score (often above 620) to qualify for a conventional loan. The better your credit score, the more favorable terms you may receive.

  3. Loan Limits: Conventional loans have maximum loan limits set by the Federal Housing Finance Agency (FHFA). These limits can vary by location and are updated annually.

  4. Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home’s purchase price, you may be required to pay for private mortgage insurance. This insurance protects the lender in case you default on the loan.

  5. Interest Rates: Interest rates for conventional loans can vary depending on market conditions, your creditworthiness, and other factors. They may be fixed (stay the same throughout the loan term) or adjustable (change periodically).

0 Down Conventional Loans

A “0 down” conventional home loan, also known as a no down payment conventional loan, is a type of mortgage that allows borrowers to finance the entire purchase price of a home without putting any money down as a down payment. Here are some key points about these loans:
  1. Conventional Loan Type: It is important to note that this type of loan is still a conventional mortgage, meaning it is not insured or guaranteed by a government agency like the FHA or VA.

  2. Eligibility: Borrowers typically need to meet certain eligibility criteria to qualify for a “0 down” conventional loan. This may include having a good credit score, a stable income, and meeting the lender’s underwriting requirements.

  3. Private Mortgage Insurance (PMI): In many cases, borrowers who opt for a “0 down” conventional loan will need to pay for private mortgage insurance (PMI). PMI protects the lender in case the borrower defaults on the loan. The cost of PMI can vary based on factors like the loan-to-value ratio and the borrower’s credit profile.

  4. Higher Interest Rates: Loans with no down payment may come with higher interest rates compared to conventional loans where a down payment is made. This is because a larger loan amount increases the lender’s risk.

  5. Program Availability: Some lenders and financial institutions offer specific programs or products designed to facilitate “0 down” conventional loans. These programs may have different terms and requirements, so it’s important for borrowers to research and compare options from different lenders.

  6. Income and Debt Requirements: Borrowers typically need to demonstrate sufficient income and meet debt-to-income ratio requirements to qualify for a “0 down” conventional loan. Lenders assess these factors to ensure that borrowers can afford their monthly mortgage payments.

Have a Question?

Flint Hills Mortgage Has An Answer

A conventional home loan is a mortgage not insured or guaranteed by a government agency such as the FHA or VA. It is typically offered by private lenders and requires meeting specific credit and financial criteria.

Advantages include potentially lower interest rates compared to government-backed loans, flexibility in loan terms and amounts, and no upfront mortgage insurance premiums (if putting down at least 20%).

Eligibility criteria usually include a good credit score (typically 620 or higher), a stable income, and a down payment (often ranging from 3% to 20% of the home’s purchase price).

PMI is insurance that protects the lender if the borrower defaults on the loan. It is required when the down payment is less than 20% of the home’s purchase price.

Yes, conventional loans typically do not have prepayment penalties, allowing borrowers to pay off their loan ahead of schedule without incurring additional fees.

Conventional loans commonly offer fixed-rate and adjustable-rate options with terms ranging from 10 to 30 years. Fixed-rate loans maintain the same interest rate throughout the loan term, while adjustable-rate loans may adjust periodically based on market conditions.

Conventional loans traditionally require a down payment. However, some lenders offer programs that allow borrowers to obtain a conventional loan with a 0% down payment. These programs often have specific eligibility requirements, such as:

  • Good credit score (typically 700 or higher).
  • Stable income and employment history.
  • Debt-to-income ratio within acceptable limits.
  • Private mortgage insurance (PMI) or other cost adjustments may apply to compensate for the lower down payment.

While 0% down conventional loans can make homeownership more accessible, they may come with higher interest rates, stricter qualification criteria, or additional costs like PMI.

Contact mortgage lenders or brokers who offer conventional loan products and inquire about their specific requirements and programs for 0% down payment options. They can provide personalized guidance based on your financial situation.

Yes, conventional loan guidelines typically allow for down payment assistance in the form of gifts from family members or grants from eligible organizations. However, specific documentation and requirements may apply to ensure the funds are properly sourced and do not require repayment.


Loans are subject to credit approval. Terms and conditions apply. VA loans are available to eligible veterans, active-duty service members, and certain spouses. USDA loans are available for properties located in eligible rural areas and are subject to income limits. FHA loans require mortgage insurance premiums and have specific eligibility requirements. Conventional loans typically require a down payment and private mortgage insurance (PMI) if the down payment is less than 20% of the home's purchase price. 0 down conventional loans are subject to lender approval and may have stricter credit and income requirements. Borrowers should consult with a mortgage specialist to determine eligibility and explore all available loan options.

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