Conventional Mortgage

A conventional mortgage is not insured or guaranteed by a federal mortgage program such as the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA). Many conventional loans are originated under standards established by Fannie Mae or Freddie Mac.

Conventional Does Not Mean 20% Down

Certain conventional programs permit eligible borrowers to finance up to 97% of the home’s value, equivalent to a 3% down payment.

Why 20% Still Matters

Twenty percent can affect mortgage insurance, leverage, pricing, monthly payment, and starting equity. It is not a universal minimum down payment.

Liquidity Matters Too

Putting more money down can reduce borrowing costs, but it also reduces cash available for reserves, repairs, moving expenses, and other goals.