A conventional loan is one no government agency insures or backs, and a conforming one is written to Fannie Mae and Freddie Mac guidelines. One reason to pick it over FHA is the mortgage insurance: on a one-unit home you live in, the Homeowners Protection Act of 1998, subject to its conditions and exceptions, gives you the right to ask for borrower-paid mortgage insurance to be canceled once the loan is paid down far enough against the home's original value, and requires it to end automatically at a later point on the loan's amortization schedule.
2026 limit for a single-unit home. Source: FHFA CY2026 HERA-based county loan limit list, San Luis Obispo County, CA (FIPS 06079, CBSA 42020). See the published list. Limits are republished every year. All of the county's loan limits.
What a lender weighs before this program is on the table. A lender can add rules of its own, and those rules can differ from one lender to the next.
There is no federal minimum credit score on a conventional loan, because nothing federal insures it. Fannie Mae sets no minimum score for a file run through its Desktop Underwriter, and at least 620, with exceptions, for one underwritten by hand, and lenders are free to require more than either.
A conventional file is run through Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Product Advisor, and the engine returns what the file needs: how much income documentation, what reserves, what has to be explained. That answer is a far better guide to whether you qualify than any rule of thumb.
A lender is free to require more than Fannie Mae or Freddie Mac does, and those extra rules can differ from one lender to the next. One lender's no is not always conventional's no.
The payment has to fit your income alongside what you already owe, and the income has to be documented in a form the engine and the underwriter will both accept. Self-employed and commissioned income can qualify; it takes more paper, not a different program.
A primary residence or an investment property of one to four units works, and so does a one-unit second home. Condominium projects are where conventional guidelines get specific, and a project a lender will not finance is much better found early than late.
The steps in order, so you can see what is coming. Nothing here is underwritten until a lender underwrites it.
Price range, the town, what you have for the purchase and what you earn. That is enough to start with, and there is no credit pull to have the conversation.
With your permission we pull credit, and nobody promises you anything before the file has been reviewed.
The guidelines underneath are Fannie Mae's and Freddie Mac's. What differs is what each lender adds on top.
After the call, if you qualify, your loan officer can write a pre-qualification letter and stays with the file into underwriting and funding.
If yours is not here, call us. The useful answer depends on your file.
There is no federal minimum credit score for a conventional loan, because conventional loans are written to Fannie Mae and Freddie Mac guidelines rather than insured by a government program. Fannie Mae sets no minimum score for a file run through its Desktop Underwriter, and at least 620, with exceptions, for one underwritten by hand, or 640 if the rate is adjustable. Each lender is free to require more through rules of its own.
Private mortgage insurance on a conventional loan does not have to be permanent. On a one-unit home the borrower lives in, the Homeowners Protection Act of 1998 gives the borrower the right, subject to its conditions and exceptions, to request cancellation of borrower-paid mortgage insurance once the loan is paid down far enough against the home's original value, and requires it to end automatically at a later point on the loan's amortization schedule. Ask a loan officer to show you where your own loan sits against those two rights before you assume you are stuck with it.
Neither is better in the abstract. A conventional loan can suit a borrower with solid credit and documented income, in part because its mortgage insurance can end, while FHA's waiting periods after a bankruptcy or a foreclosure are shorter than Fannie Mae's. The comparison that matters is the two of them priced against your actual file.
A conventional loan is conforming when it is at or below the conforming loan limit for the county the property sits in, a figure the Federal Housing Finance Agency publishes every year. Above that limit Fannie Mae and Freddie Mac cannot buy the loan, so it becomes a jumbo loan written to an individual lender's own guidelines. San Luis Obispo County is a high-cost area, so its limit sits above the national baseline.
Above the conforming limit
For a loan above the county's conforming limit, where each lender writes its own guidelines.
Government-insured
Government-insured, with credit score tiers HUD publishes.
A rate that adjusts
The rate holds for an opening period, then adjusts with an index and a margin inside caps. For a borrower who does not expect to keep the loan long.
Where this program fits:Buying a homeRefinancingThe county's loan limitsThe Central CoastServices
Side by side:FHA vs conventionalVA vs conventionalConventional vs jumboBank statement vs conventionalDSCR vs conventionalHELOC vs cash-out refinance
Where it comes up in the county:Santa MariaOrcuttLompoc
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This page is general information about a loan program, not an offer of credit or a commitment to lend. What a lender will do with your file depends on the file.
Answer a few questions and your loan officer can talk you through which programs could fit your file, including when this one does not.
No credit pull to get started. This is not a commitment to lend. Equal Housing Opportunity.
