In short
A conventional loan is a mortgage without government insurance, typically following Fannie Mae and Freddie Mac conforming guidelines — allowing as little as 3% down, with PMI that's removable once you build about 20% equity. America's Mortgage Solutions structures conventional loans across South Florida with deliberate choices on down payment, PMI, term, and occupancy, rather than default settings.
Reviewed by Christian Penner, NMLS #368289 · Last updated July 24, 2026
What is a conventional loan, and is it right for me?
A conventional loan is a mortgage that isn't insured by a government agency — most follow Fannie Mae and Freddie Mac guidelines and are called "conforming." They allow as little as about 3% down for qualified buyers, and private mortgage insurance (PMI) applies under 20% down but can be removed once you build enough equity — a structural advantage over FHA's usually-permanent MIP. Conventional also covers ground government loans can't: second homes and investment properties, condos, and larger loan amounts up to each year's conforming limit. Whether it's right for you comes down to your credit and file — strong files tend to shine here, and we'll run it against FHA side by side so you're choosing on numbers, not vibes.
Key takeaways
A conventional loan looks simple from the outside — and that's exactly why so many are set up lazily. Down payment, mortgage insurance, term, occupancy, property type: each is a lever, and the way they're combined changes what you pay every month and over the life of the loan. Christian studied finance and real estate at the University of Florida and has structured conventional loans since 1997, for everyone from first-time buyers in Lake Worth Beach to move-up families in Palm Beach Gardens to snowbirds buying a second place near the water. We don't just take your application — we engineer the loan.
The Workhorse — If You Set It Up Right
Most mortgages in America are conventional loans, and most of the ones we review from other lenders were set up on autopilot: default term, default structure, no thought given to PMI strategy or how the loan fits the borrower's actual plans. That's the difference at America's Mortgage Solutions. Christian's background is finance and real estate — University of Florida, then nearly three decades of structuring loans across South Florida — and a conventional loan gives a structurer more levers than any other mainstream product.
The Levers That Matter
- Down payment. Qualified buyers can put down as little as about 3%. But 5%, 10%, 15%, and 20% each shift your PMI and payment differently — sometimes a little more down buys a lot less cost, sometimes it buys almost nothing. We model the tiers so you deploy cash deliberately.
- PMI strategy. Under 20% down, PMI applies — but it's removable once you build roughly 20% equity, and it can be structured monthly, single-premium, or lender-paid. In an appreciating market, buyers often shed PMI faster than they expect. We'll show you each path.
- Term. Thirty years is the default, not the answer. Shorter terms build equity dramatically faster; the right choice depends on your cash flow and what else your money should be doing.
- Occupancy and property type. Primary home in Wellington, second home near the beach in Juno, investment duplex in West Palm — conventional handles all three, with different requirements for each. Structuring occupancy correctly (and honestly) up front keeps deals alive.
Conforming Limits and the Jumbo Line
Conforming loan limits reset every year, and in Palm Beach County's price ranges plenty of buyers land near the line. Which side you fall on changes your documentation, reserves, and options — and sometimes a modestly larger down payment keeps you conforming on purpose. We'll tell you exactly where your scenario sits and what each side of the line means for you; if jumbo is the answer, that's our territory too.
Condos and the Conventional Checklist
South Florida condo buildings get reviewed under Fannie and Freddie warrantability rules — budgets, reserves, insurance, litigation, rental mix. Plenty of buildings here pass; a meaningful number don't. We vet the project at the start, and because our shelf includes portfolio and non-warrantable condo programs, a failed review is a detour with us, not a dead end.
Who Conventional Rewards
Conventional financing tends to reward strength — solid credit, documented income, some savings. If that's you, it's usually the most cost-efficient mainstream path to owning. If your file is more complicated — self-employed income, a credit event, unusual property — we're one of the few teams that can honestly compare conventional against a full shelf of alternatives, because we carry the alternatives too. Either way, you get the loan that fits, not the one that was easiest to close.
All figures and program details on this page are illustrative examples for general education only and are not an offer or commitment to lend. Guidelines, conforming limits, and PMI requirements change. Contact our team for details specific to your situation, and ask us for your rate.
Quick facts
- Loan type
- Not government-insured (conforming)
- Typical minimum credit score
- Generally around 620+
- Typical minimum down payment
- As low as 3% for eligible buyers
- Mortgage insurance
- PMI required under 20% down; removable at 20% equity
- Occupancy
- Primary, second home, or investment
- Loan limits
- Conforming limits change annually — ask for current figures
Is this loan right for you?
Who it's for
- Buyers with solid credit and documented income who want the most cost-efficient mainstream loan
- Move-up buyers and refinancers who benefit from removable PMI and flexible terms
- Snowbirds and investors — conventional covers second homes and investment properties government loans can't
- Palm Beach County buyers near the conforming/jumbo line who need the scenario run both ways
Who it may not fit
- Buyers with thin or recovering credit, who often do better starting with FHA's flexibility
- Self-employed borrowers whose tax returns understate real income — our bank statement and Non-QM programs read income the way it actually works
Pros and cons
Pros
- As little as about 3% down for qualified buyers, with gift funds allowed
- PMI is removable with equity — a structural long-term advantage over FHA MIP
- Covers primary homes, second homes, and investment properties
- More structural levers (term, PMI type, occupancy) for a team that actually uses them
Trade-offs to weigh
- Rewards strong credit — thinner files may find FHA more forgiving
- South Florida condo purchases depend on the building passing warrantability review
Frequently asked questions
How much do I need to put down on a conventional loan?
As little as about 3% for qualified buyers on a primary residence. But the more useful question is what your down payment should be: each tier changes your PMI and monthly payment differently, and sometimes a small change in down payment buys an outsized change in cost. We model the tiers against your cash so you decide with the numbers in front of you.
How do I get rid of PMI on a conventional loan?
PMI can be removed once you've built roughly 20% equity — through paydown, appreciation, or both — which is a key advantage over FHA's usually-permanent MIP. You can also structure around monthly PMI from day one with single-premium or lender-paid options. We'll show you each path priced against your scenario, and as your lender for life, we'll flag the moment removal becomes possible.
Conventional or FHA — which is better for me?
It depends entirely on your file. Stronger credit and more savings usually favor conventional, especially since PMI is removable; thinner credit or a recent credit event usually favors FHA's flexibility. There's no universal answer, which is why we price both against your actual numbers and show you the side-by-side. The comparison takes us minutes and can save you real money.
Can I use a conventional loan for a second home or investment property in Florida?
Yes — that's one of conventional financing's biggest advantages over government programs. Second homes and investment properties are both eligible, with larger down payment and reserve requirements than a primary residence. We structure these regularly for snowbirds and investors across South Florida, and if the numbers fit better under a DSCR or portfolio program, we carry those too and we'll tell you straight.
What happens if my loan amount is above the conforming limit?
Then you're in jumbo territory, which changes documentation, reserves, and available structures. Limits reset every year, and Palm Beach County buyers frequently land near the line. Sometimes a slightly larger down payment deliberately keeps the loan conforming; sometimes jumbo is simply the right answer. We'll run your scenario both ways — jumbo is a specialty of ours, not a referral.
Related loan programs
Christian Penner grew up in North Palm Beach and has been walking first-time buyers to the closing table since 1997. We'll map your down payment options, your budget, and your path — even if that path takes a plan over time.
Credit still healing? Savings still growing? FHA was built for exactly that — and America's Mortgage Solutions has been finding FHA paths for Palm Beach County buyers other lenders turned away since 1997.
Zero down, no monthly mortgage insurance, and a Palm Beach County team that treats your VA benefit with the care it deserves — from first conversation to keys.
Last updated July 24, 2026 · Reviewed by Christian Penner, NMLS #368289. This page is educational and not a commitment to lend; program details change — ask for current figures.