Flexible Financing with Conventional Loans
A great choice for borrowers with strong credit and steady income—competitive rates and versatile options.
- Lower interest rates for well-qualified borrowers
- Flexible loan terms (10, 15, 20, or 30 years)
- Lower private mortgage insurance (PMI) costs
- No upfront mortgage insurance premium
- Available for primary, secondary, and investment properties
- Higher loan limits than government-backed loans
- More options for fixed-rate and adjustable-rate mortgages
- Can be used for refinancing to lower payments
- No property restrictions (unlike FHA or VA loans)
- Streamlined approval for strong credit profiles
Estimate your standard home loan payment
Do you qualify for a conventional loan?
Here’s what underwriters actually look at — and what each requirement really means once you’re past the textbook version.
Credit Score
Conventional starts at 620, and your pricing improves materially once you cross 680. Honest answer though: the score matters less than your LTV. A 700 borrower at 95% LTV often pays more than a 680 borrower at 75% LTV. We can run both scenarios in 10 minutes.
Debt-to-Income Ratio
Plan around 50% as the practical ceiling. The Fannie and Freddie automated underwriting engines (DU and LP) will push past 50% in cases with strong compensating factors — usually 1, 3, or 6 months of payment reserves. If you're tight, tell us up front and we'll show you what reserves it takes to make it work.
Down Payment
10% is what we see most in our actual closing pipeline. 3% is possible with HomeReady or Home Possible if your income fits. 20% gets you out of PMI. There's no universal right answer — sometimes 10% down with lender-paid MI gives you a moving safety net or money to furnish the place, and that's the better outcome.
Income Documentation
W-2 borrowers: 2 years of W-2s, recent pay stubs, and bank statements. Self-employed: 2 years of personal and business tax returns plus a year-to-date P&L. If you don't fit the standard 2-year box (recent job switch, big income year-over-year change), tell us up front — there are usually exceptions if we know about them early.
Reserves & Assets
Primary residence with a strong file: often zero reserves required. Investment properties, weaker DTI, or multiple financed homes: 2-6 months of PITI in cash, IRA, or 401(k) — 60% of retirement balance counts toward reserves. Down payment funds need to be seasoned (60 days in your account) or fully sourced.
Standard Home Loan
Conventional loans are one of the most popular mortgage options for borrowers with strong credit and steady income. Unlike government-backed loans, conventional loans offer more flexibility in loan amounts, property types, and mortgage insurance requirements.
Here's how I think about it: if you're not a veteran and you have 20% equity (or anything close to it) within the conforming loan limit, this is the product for you. Conventional gives us a wide range of uses — purchases, cash-out, buyouts, renovations, even construction. It works with most income types. We can sometimes skip the full appraisal with a property inspection waiver or a desktop appraisal. Conventional is really flexible once you know all of the options.
These loans are also easier to qualify for than most borrowers think. You don't need 20% down to purchase, and you don't need 20% to refinance. You don't need mortgage insurance once you cross 80% LTV. And you don't always need 2 years of income — there are real exceptions if you tell us your situation up front.
One program I wish more qualified borrowers asked about: HomeReady (Fannie) and Home Possible (Freddie). If you're under the income limits in your area, you get better pricing and easier qualification than standard conventional. Worth a 10-minute conversation before you assume you don't qualify.
Your situation and goals matter more than the lowest rate on a chart. Everyone wants the lowest rate and lowest costs, but the cheapest option on paper isn't always the right move. The more you tell us about what you're trying to accomplish — moving up, getting cash out, building, downsizing — the better we can match the product to the goal. Sometimes 10% down with lender-paid mortgage insurance gives you a moving safety net or money to furnish the new place, and that's a better outcome than putting every dollar into the down payment.
Conventional Loan vs FHA vs VA — what’s actually different
If you’re weighing options. Numbers reflect 2026 program parameters.
| Conventional Loan | FHA | VA | |
|---|---|---|---|
| Minimum credit | 620 | 580 (3.5% down) / 500 (10% down) | No VA floor; lenders typically 580+ |
| Minimum down payment | 3% (HomeReady/Home Possible) | 3.5% | 0% |
| Mortgage insurance | PMI drops at 20% equity (auto at 22%) | MIP for life of the loan (most cases) | None — funding fee only, financed |
| Loan limit (Maricopa Co., 2026) | $806,500 (FHFA) | $524,225 (HUD) | No cap; follows conforming |
| Property restrictions | None — primary, second home, investment | Primary only; property must meet FHA standards | Primary only; VA appraisal required |
| Best for | Strong credit (700+), 5%+ down, want flexibility | Lower credit, lower down, first-time buyer | Eligible veterans — usually the cheapest option |
Not sure which fits? Tell us your situation and we'll run the side-by-side on your real numbers in about 15 minutes.
What to expect — the 5 steps
Here's how an Elevated conventional loan actually flows from first conversation to funded. Direct-to-underwriter communication keeps the file moving — no call-center handoffs.
- 1
Pre-qualification15 min
Quick phone or web conversation. No credit pull yet. Gives you a price-range ballpark for house hunting and surfaces anything that needs to be cleaned up before pre-approval.
- 2
Pre-approval1-3 days
We pull credit. You send pay stubs, W-2s, and recent bank statements. We issue a pre-approval letter you can submit with offers. Real underwriting starts here, not at application.
- 3
Application + processing5-10 days
Once you're in contract on a house, the full application goes in. Appraisal ordered, title work begins, conditions list shrinks. Biggest source of delay we see: missing or late documents from a borrower's CPA or HR department.
- 4
Underwriting3-10 days
Final review of income, assets, appraisal, and title. "Clear to close" is the magic phrase. Because we have direct-to-underwriter communication at Elevated, we pre-empt most conditions and move faster than the industry average here.
- 5
Closing1 day
Sign at title, funds disburse, keys hand off. Wire your down payment day-of. The most common closing-day surprise: bringing the wrong wire amount or sending it from a different account than the one we documented. We confirm wire details 24 hours ahead to prevent this.
What credit score do I really need for a conventional loan in 2026?
620 is the floor. Once you cross 680 your pricing improves materially, but honestly the score matters less than your loan-to-value (LTV). A 700 borrower at 95% LTV often pays more than a 680 borrower at 75% LTV. We can run both scenarios in about 10 minutes.
How much down payment do I really need?
In our actual closing pipeline, 10% is the most common. 3% is possible with HomeReady or Home Possible if your income qualifies. 20% gets you out of PMI. There is no universal right answer — it depends on what else you need the cash for. If you're moving and want a buffer for furnishings or repairs, 10% with lender-paid mortgage insurance is often the smarter move.
How long does PMI last on a conventional loan?
PMI ends automatically when your principal balance hits 78% of the original purchase price. You can request removal at 80% LTV using either the original or a current appraised value. Compare that to FHA, which keeps MIP for the life of the loan in most cases — that's the headline difference.
What's the 2026 conforming loan limit in Maricopa County?
$806,500 for a single-unit property (FHFA). Above that you're in jumbo territory and the rules change. For 2-4 unit properties the limits are higher.
Can I use gift funds for the down payment?
Yes — and don't make a big deal out of it. We write clean gift letters and document the source. If the funds haven't been transferred yet, the cleanest path is wiring them directly to title at closing. That way we verify the funds arrived without you having to prove they made it from your family's account, into yours, then out to title.
I'm self-employed. Can I still qualify?
Yes. Plan on 2 years of personal and business tax returns plus a year-to-date P&L. Underwriters usually average your last 2 years of income, but if you trend down they use the most recent year. There are also bank-statement and 1099-only paths if your tax returns don't reflect actual cash flow — tell us about your situation upfront so we can pick the right lane.
How is conventional different from FHA in real dollars?
FHA charges upfront MIP (1.75% of the loan, financed) plus monthly MIP for the life of the loan in most cases. Conventional has no upfront fee and PMI drops off at 20% equity. On a $400K loan with 5% down, conventional usually beats FHA over the long run if your credit is 700+. We'll run both side-by-side for you — takes about 15 minutes.
Can I have multiple conventional loans?
Yes. Fannie Mae allows up to 10 financed properties. After your 5th investment property, reserve requirements and pricing get tighter. If you're scaling, we plan the sequence.
What about adjustable-rate (ARM) conventional loans?
Available. 5/6 and 7/6 ARMs are the most common — fixed for 5 or 7 years, then adjusts every 6 months. ARMs make sense if you know you'll sell or refinance before the fixed period ends. If you're staying long-term, fixed is usually the better call.
How long does the conventional closing process actually take?
From contract to keys, expect 21-30 days for a clean purchase. At Elevated we close in 8 days on average because we have direct-to-underwriter communication and can control the file flow. Refinances run 30-45 days at most lenders; we're faster.
What's new with Conventional Loan
Plain-English summaries of recent agency updates that affect borrowers.
Authorized user credit rules updated for some conventional mortgage applicants
Fannie Mae updated how lenders should treat authorized user accounts when reviewing a borrower’s credit, which could affect how some applicants qualify. The update also says IRS Form 8821 may be used instead of Form 4506-C in some cases, which may slightly simplify income verification paperwork for borrowers.
Conventional rules updated for tax plans, construction loans, co-ops, and e-notarization
Fannie Mae updated several conventional mortgage rules that can matter to borrowers, including guidelines for people on IRS tax installment plans, some single-close construction-to-permanent loans, co-op project eligibility, and remote online notarization. Depending on your situation, this could affect whether you qualify, what property types are eligible, or whether you can complete parts of your closing process online.
Conventional in the Phoenix metro
Most of our Phoenix-area conventional borrowers fall in the 5–15% down range and close in 8 days from our Scottsdale office because we have direct-to-underwriter communication. Median list across Maricopa County ZIP codes sits well inside the 2026 conforming limit, so conventional is the right call for the vast majority of buyers.