Conventional loans.
Traditional financing backed by Fannie Mae or Freddie Mac. Competitive rates for borrowers with strong credit profiles, with down-payment options as low as 3% for first-time buyers.
What is a conventional loan?
A conventional mortgage is a home loan that is not insured or guaranteed by a federal government program (FHA, VA, USDA). Most conventional loans are conforming — meaning they meet the loan-amount limits and underwriting guidelines set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy mortgages on the secondary market.
Most common mortgage in the U.S.
Conventional loans typically offer the most competitive rates for borrowers with credit scores of 680 or higher — and they're the default starting point for most strong-credit buyers in Florida.
Conventional loan requirements in Florida
Credit score
Most lenders require a minimum 620, though 680+ unlocks better rates. 740+ generally qualifies for the most competitive pricing.
Down payment
3% minimum for first-time buyers (HomeReady / Home Possible). 5% for repeat buyers. 20% to avoid private mortgage insurance.
Debt-to-income
Generally 45% or lower, though some programs allow up to 50% with compensating factors like strong reserves or excellent credit.
Income docs
Two years of W-2s or tax returns, recent pay stubs, and bank statements showing reserves. Self-employed buyers add business returns.
Conventional vs. FHA in Florida — which is better?
The right answer depends on your credit and down payment situation. Here's the quick read:
Lower long-term cost when credit is strong
For borrowers in the 700+ range with 10% or more down, conventional typically beats FHA on rate and on total mortgage-insurance cost over the life of the loan.
- PMI is removable at 20% equity
- No upfront mortgage insurance premium
- Wider range of property types & condos
More flexible when credit or cash is tight
FHA's lower credit thresholds and 3.5% down — with gift funds allowed for the entire down payment — often make it the cheaper path on day one.
- Approval typically possible from 580
- Shorter waits after bankruptcy / foreclosure
- Mortgage insurance generally lasts the life of the loan
This is exactly the kind of comparison Debbie runs for every client during the consultation — using your actual credit pull and target purchase price.
Fixed-rate vs. adjustable-rate
Conventional loans come in two interest-rate structures. Which one fits depends on how long you plan to keep the loan.
Locked for the life of the loan
Your interest rate — and your principal-and-interest payment — never changes for the entire term, typically 15, 20, or 30 years. Predictability is the whole point.
Lower starting rate, then adjusts
Adjustable-rate mortgages start with a fixed rate for an introductory period (5, 7, or 10 years), then adjust periodically based on a market index. The trade-off: a lower opening rate.
Removing PMI
If you put less than 20% down on a conventional loan, you'll pay private mortgage insurance (PMI). Unlike FHA, PMI on a conventional loan is removable.
PMI on a conventional loan automatically drops off when your loan-to-value reaches 78%. You can also request removal at 80% LTV. That's a meaningful difference from FHA, where mortgage insurance often lasts the life of the loan.
Conforming loan limits in Florida (2026)
2026 conforming loan limit (most FL counties)
$806,500 for a single-family home. Higher-cost counties may have higher limits. Loan amounts above that are jumbo financing — different underwriting and pricing.
The right fit for borrowers with strong credit and steady income.
Lower long-term cost
For borrowers with credit scores in the 700s, conventional financing typically beats FHA on rate and total mortgage insurance cost over the life of the loan.
PMI that goes away
Unlike FHA mortgage insurance, private mortgage insurance on a conventional loan can typically be removed once you reach 20% equity — and it drops off automatically at 78% loan-to-value.
Flexible property types
Conventional loans often allow second homes, investment properties, and a wider range of condo projects than government-backed programs — useful for buyers with broader plans.
HomeReady and Home Possible — strong-credit, low-down options.
Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow eligible first-time buyers to put just 3% down on a conventional loan — often with reduced PMI pricing compared to a standard conventional. Income limits apply, but they're more generous than most buyers expect, especially in Pasco and Pinellas.
For repeat buyers with strong credit, a 5%-down conventional may still come out ahead of FHA on a total-cost basis once mortgage insurance is factored in.
See what your monthly payment would look like.
The mortgage payment estimator on the homepage gives you a number in under 30 seconds. For refinance scenarios, try the dedicated break-even calculator.
Common questions about conventional loans in Florida.
How much do I really need to put down on a conventional loan in Florida?
First-time buyers may qualify for as little as 3% down through Fannie Mae's HomeReady or Freddie Mac's Home Possible programs. Repeat buyers typically need 5% down minimum. To avoid private mortgage insurance entirely, you'd put 20% down. The right answer depends on your credit, the home price, and how long you plan to stay — Debbie can run the math both ways during a free consultation.
What credit score do I need for a conventional loan?
Most conventional lenders require a minimum credit score of 620, though scores of 680 or higher generally unlock better pricing. Borrowers with scores of 740+ typically see the most competitive rates and lowest PMI. If your score is below 620, an FHA loan is often the more realistic path.
What's the difference between a conforming and a jumbo loan?
A conforming loan meets the loan-amount limits set by Fannie Mae and Freddie Mac — currently $806,500 for most Florida counties (2026). A jumbo loan exceeds those limits and follows different underwriting guidelines, typically with stricter credit, reserve, and down payment requirements. Most Florida buyers fall under the conforming limit.
When does PMI come off automatically on a conventional loan?
Federal law requires lenders to automatically remove private mortgage insurance once your loan-to-value ratio reaches 78% — based on the original purchase price and your scheduled payments. You can usually request earlier removal once you reach 80% loan-to-value, often supported by a current appraisal showing the home's increased value.
Can I use gift funds for a conventional down payment?
Yes. Conventional loans typically allow gift funds from a family member to cover all or part of your down payment, with proper documentation (a signed gift letter and a paper trail showing the transfer). Some programs require a small percentage to come from your own funds if you're putting less than 20% down — Debbie can confirm what applies to your specific scenario.