Conventional Loans

A conventional loan is a type of mortgage that isn’t backed by a government agency, such as the Department of Veterans Affairs. Conventional mortgages often meet the down payment and income requirements set by Fannie Mae and Freddie Mac, and conform to the loan limits set by the Federal Housing Finance Administration, or FHFA. You’ll generally need a credit score of at least 620 to qualify for a conventional loan, though a score that’s above 740 will help you get the best rate. Depending on your financial status and the amount you’re borrowing, you may be able to make a down payment that’s as low as 3% with a conventional loan. (Although be aware that a higher down payment may help get you a lower rate.)