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Conventional and jumbo loans

Conventional loans are not insured by the government. Most follow Fannie Mae and Freddie Mac rules up to the conforming loan limit; loans above that limit are jumbo loans with their own, stricter rules.

Conventional Loan Requirements in 2026: Credit, Down Payment, Limits and PMI

A conventional loan is a mortgage not insured by a government agency. Most follow Fannie Mae and Freddie Mac rules: a loan at or under the 2026 conforming limit of $832,750 in most counties, a DTI usually no higher than 50%, at least 3% down, and private mortgage insurance when you put less than 20% down.

Updated October 18, 2026 · 10 min read
Read guide: Conventional Loan Requirements in 2026: Credit, Down Payment, Limits and PMI
Jumbo Loan Requirements in 2026: Limits, Down Payment, Reserves and Credit

A jumbo loan is a mortgage larger than the conforming loan limit for your county, so Fannie Mae and Freddie Mac cannot buy it. In 2026 that means more than $832,750 for a one-unit home in most counties, or up to $1,249,125 in high-cost areas. Each lender sets its own jumbo rules, which are usually stricter.

Updated October 18, 2026 · 8 min read
Read guide: Jumbo Loan Requirements in 2026: Limits, Down Payment, Reserves and Credit
Mortgage Insurance Explained: PMI, FHA MIP, VA Funding Fee and USDA Fees

Mortgage insurance protects the lender, not you, if a borrower stops paying. Conventional loans use private mortgage insurance (PMI) below 20% down, FHA loans charge an upfront and annual mortgage insurance premium (MIP), VA loans charge a one-time funding fee instead, and USDA loans charge an upfront and annual guarantee fee.

Updated October 18, 2026 · 9 min read
Read guide: Mortgage Insurance Explained: PMI, FHA MIP, VA Funding Fee and USDA Fees

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Key dates and rule changes

May 25, 2025FHA stops insuring new loans for non-permanent residents (case numbers on or after this date).
November 16, 2025Fannie Mae's automated underwriting no longer sets a fixed minimum credit score.
January 1, 20262026 conforming ($832,750 baseline) and FHA loan limits take effect.
December 31, 2026ITINs not used on a federal tax return for three straight years expire at the end of the year.
January 1, 2027FHA begins accepting FICO 10T and VantageScore 4.0 credit scores.

Dates from HUD, Fannie Mae, FHFA and IRS notices. Check the linked guides for details.

Mortgage glossary

APRAnnual percentage rate: the yearly cost of a loan including interest and certain fees, so you can compare offers.
AmortizationPaying a loan down in equal monthly payments, where early payments are mostly interest and later ones mostly principal.
AppraisalA licensed appraiser's opinion of the home's market value, used by the lender to size the loan.
ARMAdjustable-rate mortgage: the rate is fixed for a set period, then changes with an index plus a margin, within caps.
Closing costsFees and prepaid items paid at closing, such as lender fees, title, recording, taxes and insurance.
Conforming loanA conventional loan at or below the FHFA loan limit that meets Fannie Mae or Freddie Mac rules.
Down payment assistance (DPA)Grants or second loans from states, cities or nonprofits that help pay a down payment or closing costs.
DTIDebt-to-income ratio: monthly debt payments divided by gross monthly income, shown as a percentage.
DSCRDebt service coverage ratio: a rental property's rent divided by its monthly housing payment.
EscrowAn account the servicer uses to collect and pay your property taxes and homeowners insurance.
FHA loanA mortgage insured by the Federal Housing Administration, allowing 3.5% down with a 580 credit score.
Funding feeA one-time VA loan charge that helps fund the program; some veterans are exempt.
ITINIndividual Taxpayer Identification Number from the IRS, for people who file taxes but cannot get a Social Security number.
Jumbo loanA loan above the conforming loan limit for its county, with stricter rules.
Loan EstimateA standard three-page form lenders must give within three business days of your application.
LTVLoan-to-value ratio: the loan amount divided by the home's value or price, whichever is lower.
MIPFHA mortgage insurance premium: an upfront charge plus an annual premium paid monthly.
Non-QM loanA mortgage outside the CFPB Qualified Mortgage rules, often using other income proof such as bank statements.
PITIPrincipal, interest, taxes and insurance: the main parts of a monthly housing payment.
PMIPrivate mortgage insurance on conventional loans with less than 20% down; it can be removed later.
PointsUpfront fees, each equal to 1% of the loan, paid to lower the interest rate.
Pre-approvalA lender's conditional review of your credit, income and assets, showing a likely loan amount.
ReservesSavings left after closing, counted in months of housing payments.
USDA loanA zero-down mortgage guaranteed by the US Department of Agriculture for eligible rural and suburban areas.
VA loanA mortgage guaranteed by the Department of Veterans Affairs for eligible service members, veterans and surviving spouses.

Common questions about this topic

What makes a loan conventional?

A conventional loan is any mortgage not insured or guaranteed by a government agency. Most are conforming loans that meet Fannie Mae or Freddie Mac rules.

When does a conventional loan become jumbo?

When the amount is above the conforming loan limit for the county. In 2026 the baseline one-unit limit is $832,750, with higher limits in high-cost areas.

Can I avoid PMI on a conventional loan?

Yes, by putting at least 20% down. With less down you pay PMI, but you can ask to cancel it once you reach 20% equity based on the original value, and it ends automatically at 22% in most cases.

Are jumbo rates always higher?

Not always. Jumbo rates can be close to, or even below, conforming rates for strong borrowers. The bigger differences are larger down payments, more cash reserves and stricter documentation.

Government-backed loans