Conventional Loans | Troy Mire Mortgage
Home/ Home Purchase/ Conventional Loans
Fannie Mae · Freddie Mac · Conforming and High-Balance

Conventional Loans.
The Standard, Done Right.

For borrowers with strong credit and stable income, conventional financing delivers the most competitive rates with the fewest long-term costs. The key is structuring the deal correctly from the start.

2025 Conventional Loan Snapshot — SoCal
Conforming Loan Limit$806,500
High-Balance (LA/OC)$1,209,750
Minimum Down Payment3% (first-time buyers)
Standard Down Payment5% – 20%
Minimum Credit Score620 (740 for best pricing)
PMI RequiredBelow 20% down
PMI RemovalAt 80% LTV automatically
Max DTI45% – 50% with DU approval
Program Overview

What Is a Conventional Loan?

A conventional loan is any mortgage not backed by a federal government agency. The majority of conventional loans sold on the secondary market conform to guidelines set by Fannie Mae (FNMA) and Freddie Mac (FHLMC), which is why they are also called conforming loans.

Because they are not government-insured, conventional loans require stronger borrower profiles — higher credit scores, documented income, and lower debt ratios. In exchange, they offer more flexible terms, lower long-term costs, and the ability to eliminate mortgage insurance once sufficient equity is built.

In Southern California, conventional financing dominates purchase transactions. The 2025 conforming limit for most SoCal counties is $806,500. High-balance conventional loans in Los Angeles and Orange County go up to $1,209,750 — covering a significant portion of the market without requiring a jumbo product.

Advantages
  • PMI cancels at 80% LTV
  • No upfront mortgage insurance premium
  • Lower long-term cost vs. FHA for strong borrowers
  • Broader property eligibility
  • Available for second homes and investment property
Considerations
  • Stricter credit and income requirements
  • Higher down payment needed for best pricing
  • PMI required below 20% down
  • Condo approval guidelines more restrictive
620+
Minimum Credit Score
Best rate pricing begins at 740. Each 20-point credit tier affects pricing. Where your score lands determines loan cost significantly.
3% – 20%
Down Payment Range
3% available to first-time buyers via Freddie Mac Home Possible and Fannie Mae HomeReady. Standard borrowers typically put 5% or more. 20% eliminates PMI entirely.
45%
Maximum DTI (Standard)
Debt-to-income ratios up to 50% may be approved through Desktop Underwriter with compensating factors. Higher credit scores provide more DTI flexibility.
2 Years
Employment History
Continuous employment in same field for two years is the standard. Recent job changes, gaps, or self-employment transitions require additional documentation and explanation.
Loan Programs

Conventional Program Options

Conventional covers a range of programs. The right structure depends on down payment, credit profile, property type, and long-term ownership goals.

Most Common
30-Year Fixed

The most widely used loan structure. Locks your principal and interest payment for the full 30-year term, regardless of market rate movement.

Rate TypeFixed for life of loan
Best ForLong-term primary residence
PMI RemovalAt 80% LTV
15-Year Fixed

Higher monthly payment, lower rate, and significantly less total interest paid. Builds equity rapidly. Often used by move-up buyers with strong income.

Rate TypeFixed for life of loan
Best ForPayoff acceleration, lower total cost
Rate vs 30-yrTypically 0.5% – 0.75% lower
5/1 and 7/1 ARM

Fixed rate for an initial period, then adjusts annually. Lower initial rate reduces early payment. Suitable for buyers with a known shorter hold period.

Rate TypeFixed then adjustable
Best For5 to 7 year hold horizon
Rate vs 30-yrTypically 0.25% – 0.75% lower
HomeReady / Home Possible

Fannie Mae and Freddie Mac low down payment programs for first-time and low-to-moderate income buyers. Reduced PMI rates and income flexibility.

Min Down3%
Income Limit80% of area median income
PMI RateReduced vs standard conventional
High-Balance Conventional

Available in high-cost counties including LA and Orange County. Loan limits up to $1,209,750. Same conventional guidelines, larger loan amount.

Max Loan (LA/OC)$1,209,750
Rate vs ConformingSlight premium, less than jumbo
RequirementsStandard conventional guidelines
Investment Property

Conventional financing is available for non-owner occupied 1 to 4 unit properties. Higher down payment and rate apply. Rental income may be used to qualify.

Min Down15% – 25% depending on units
Credit680+ preferred
Rental Income75% of market rent may qualify
Next Step

Find Out If Conventional Is Right for Your File

Not every borrower fits conventional. The qualification parameters are specific, and the rate pricing is heavily influenced by credit score tiers. A quick review of your profile determines whether conventional is the right path — or whether another program delivers a better outcome.

100+
Investor Relationships
20+
Years in SoCal Market
24hr
Pre-Qual Turnaround
$250M+
Funded in California
Conventional Loan Inquiry

This is not a commitment to lend. All loans subject to credit approval.