Conventional
Loans
Helpful mortgage information from Alpha Mortgage, our trusted home financing partner.
At Alpha Mortgage, we know that every homebuyer’s journey is unique. For many, a Conventional Loan is the ideal path to homeownership thanks to its flexibility, competitive rates, and variety of options. Whether you’re buying your first home, a second home, or an investment property, a Conventional Loan can provide the financing you need with fewer restrictions than government-backed programs.
What Is a Conventional Loan?
A Conventional Loan is a mortgage that isn’t insured by the federal government. Instead, it follows guidelines set by Fannie Mae and Freddie Mac, making it one of the most widely used loan programs for homebuyers today.
Down Payment Requirements:
One of the biggest advantages of Conventional Loans is the flexibility in down payment options:
- As low as 3% down for qualified first-time buyers.
- 5% down for most standard purchases.
- 20% down helps you avoid Private Mortgage Insurance (PMI).
- Options for larger down payments that can lower your monthly payment and overall loan costs.
Fannie Mae $2,500 Grant Option
For borrowers with income at or below 50% of the Area Median Income (AMI), Fannie Mae offers a $2,500 HomeReady® grant that can be applied toward:
- Down payment assistance
- Closing costs
- Or other home purchase expenses
This grant makes homeownership more achievable for qualified buyers and reduces the upfront costs of buying a home.
Specialized Programs:
HomeReady® & Home Possible®
Both Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible® programs are designed to help first-time and low-to-moderate income buyers become homeowners with affordable financing.
Benefits of HomeReady® (Fannie Mae)
- Down payments as low as 3%
- Reduced mortgage insurance requirements compared to standard conventional loans
- Flexible income sources allowed (including non-borrower household member income in some cases)
- $2,500 grant available for buyers with income ≤50% AMI
- Homeownership education to help you succeed long-term
Benefits of Home Possible® (Freddie Mac)
- 3% minimum down payment
- Reduced PMI coverage to help lower monthly payments
- Co-borrower flexibility (family or non-occupying co-borrowers allowed)
- Refinancing options available through Freddie Mac’s streamlined programs
- Focused on making homeownership possible for buyers with limited savings
Types of Properties You Can Finance
Conventional Loans—including HomeReady® and Home Possible®—aren’t just for primary residences:
Primary Residences
Perfect for buyers looking to make a house their home.
Second Homes
Finance a vacation home or getaway property with competitive terms.
Investment Properties
Build wealth by purchasing rental properties or multi-unit homes.
Why Choose a Conventional Loan with Alpha Mortgage?
- Flexible down payment options
- Competitive interest rates
- Ability to finance a wide range of property types
- No upfront funding fee (unlike VA or FHA loans)
- Options to remove PMI once 20% equity is reached
- Higher loan limits in many areas compared to FHA
- Access to special programs like HomeReady® and Home Possible®
- $2,500 HomeReady® grant for qualifying buyers
Who Qualifies?
Conventional Loans work best for buyers with good credit scores and stable income. With HomeReady® and Home Possible®, however, many first-time and moderate-income borrowers gain expanded access to affordable mortgage financing.
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