What Is a Conventional Loan?
By JC Pacific Corp Published 2026-09-01 Last professionally reviewed: September 2026
A conventional loan is a mortgage not insured by FHA or guaranteed by VA. Conventional loans may conform to standards used by major secondary-market institutions or be retained by a lender.
What Affects Qualification?
Lenders may consider:
- Credit history
- Income
- Employment
- Monthly debts
- Assets
- Down payment
- Reserves
- Occupancy
- Property type
- Appraisal
- Loan amount.
Is 20% Down Required?
No. Some qualified borrowers may obtain conventional financing with less than 20% down. A smaller down payment may involve private mortgage insurance and other pricing considerations.
What Properties Can Qualify?
Potential property types include:
- Single-family homes
- Condominiums
- Townhouses
- Eligible multi-unit properties
- Second homes
- Investment property.
Requirements differ by occupancy, property and loan structure.
Frequently Asked Questions
Is a conventional loan always cheaper than FHA?
No. Compare the complete costs based on the borrower's circumstances.
Can a first-time buyer use a conventional loan?
Yes, subject to qualification.
Does conventional financing require perfect credit?
No universal score applies to every loan. Better credit may improve pricing or options.
Ask the lender to compare down payment, mortgage insurance, costs and payment across realistic alternatives.
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JC Pacific Corp is an Irvine-based Southern California brokerage helping buyers navigate offers, escrow, and financing. Tell us what you are looking for and we will point you to current options across the region.
A note on legal advice: These guides provide general, educational information about California real estate practice. They are not legal advice and do not create an attorney-client relationship. Mortgage information is general education, not individualized lending, tax or legal guidance. For advice about your specific offer, contract, closing or financing, consult a qualified California real estate attorney and a qualified mortgage professional.