What is a conventional loan?
A conventional loan is any mortgage not insured by a government agency like the FHA or VA. Most conform to standards set by Fannie Mae and Freddie Mac (hence "conforming" loans). For Cleveland buyers with solid credit and steady income, conventional financing is often the cheapest option over the life of the loan — especially because the mortgage insurance is cancelable.
Conventional loan requirements
3–5% down payment
As little as 3% for qualified first-time buyers; 5% is common otherwise. More down lowers your PMI.
620+ credit score
620 is the typical floor; the best rates and lowest PMI go to scores of 740+.
Manageable DTI
Debt-to-income usually up to ~45%, sometimes higher with strong credit and reserves.
Flexible property types
Primary homes, second homes, and investment properties — not just owner-occupied.
2026 conforming loan limits in Cuyahoga County
One-unit conforming limit
Cuyahoga County uses the national baseline conforming limit. Borrow above it and you're into jumbo loan territory, which has stricter requirements.
*2025 baseline shown; the FHFA updates conforming limits annually — we'll confirm the current figure on your quote.
Private mortgage insurance (PMI)
If you put less than 20% down, you'll pay PMI — but unlike FHA's MIP, conventional PMI is cancelable:
- You can request removal once you reach 20% equity.
- It automatically terminates at 22% equity based on your original schedule.
- Higher credit scores mean lower PMI rates.
That cancelability is a big reason stronger-credit buyers choose conventional over FHA.
Conventional vs. FHA
| Conventional | FHA | |
|---|---|---|
| Min down | 3% (first-time) | 3.5% |
| Min credit | ~620 | 580 (500 w/ 10%) |
| Mortgage insurance | PMI — cancelable at 20% | MIP — often for loan life |
| Best for | Stronger credit | Lower credit / savings |
Want to see both side by side for your situation? Start a quote or read our first-time buyer guide.
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Conventional loan FAQ
Yes — programs like Fannie Mae HomeReady and Freddie Mac Home Possible allow first-time buyers to put down as little as 3%, and they can pair with OHFA assistance.
Once you reach 20% equity, you can request PMI removal; it cancels automatically at 22%. Rising Cleveland home values can get you there faster.
It depends on your credit. With a 620+ score, conventional often costs less long-term because PMI is cancelable. With lower credit or savings, FHA may be the better fit.
Yes. Conventional financing covers primary homes, second homes, and investment properties (with a larger down payment for investments).
Conventional Loans Explained
Understand conventional loans and how they compare to FHA and government-backed options.