Loans Buy a home Fannie Mae conventional
Conventional loans backed by Fannie Mae
This is the most common mortgage in the country. It is flexible for primary homes, second homes and rentals, and its mortgage insurance can be removed as you build equity.
New to this loan? Start here: The four main loan types A 3-minute lesson
Who it fits
Conventional is the default choice for buyers with solid credit, whether you are buying your first home, moving up, adding a cabin or buying a rental. It has no upfront mortgage insurance fee, and the monthly insurance goes away once you have enough equity.
In Southwest Colorado, acreage, wells, septic and outbuildings are common, and they work with conventional loans when the appraisal supports the home’s value. Second homes near Durango, Pagosa Springs and Telluride are a frequent fit.
What you can buy
| Home | Minimum down |
|---|---|
| 1-unit home you live in (first-time buyer) | 3% |
| 1-unit home you live in | 5% |
| 2–4 units you live in | 5% |
| Second home | 10% |
| 1-unit rental | 15% |
Pricing depends on more than your rate
Your credit score, down payment and property type all shift the price of a conventional loan. Crossing a pricing threshold, such as a 680 score or 10% down, can lower your cost noticeably. We look for those thresholds and tell you when a small change is worth making. See How we choose your loan program.
Calculators and guides
- Mortgage payment calculatorYour full payment for each loan type, and where any payment goes.
- Points break-even calculatorWhen paying points for a lower rate starts to pay for itself.
- How we choose your loan programThe steps behind a recommendation
- Same home, four loan typesConventional, FHA, VA and USDA side by side, VA first.
- Payment, cash and the middle groundThe lowest payment, the least cash, and the option between them.
- When mortgage insurance comes offWhen conventional mortgage insurance comes off, and how FHA differs.
Common questions
Do I need 20% down for a conventional loan?
No. Putting 20% down avoids mortgage insurance, but qualifying first-time buyers can put down 3% and others 5% on a home they will live in.
What is the conforming loan limit in La Plata County for 2026?
For a 1-unit home it is $832,750, the national baseline. Loans above the limit are jumbo loans with different rules.
How do I remove PMI?
Ask your servicer in writing once your balance reaches 80% of the original value, or it ends automatically at 78% if you are current. See the CFPB's explanation.
Fannie Mae or Freddie Mac?
You do not choose directly. The lender sells the loan to one or the other. Their rules are similar, and we use the differences when they help you.