America’s Most Popular Loan — Made Simple for Tennessee Buyers
Flexible, affordable, and built for primary homes, second homes, and investment properties. If you’ve got solid credit and a plan, conventional is likely your best move.
How Much Do You Need to Put Down?
Conventional loans are flexible — your down payment affects your rate, PMI, and monthly payment. Here’s how the tiers break down.
HomeReady / Home Possible
- Fannie Mae & Freddie Mac programs
- Income limits may apply
- PMI until 20% equity
- Great for moderate-income buyers
Standard Conventional
- No income limit restrictions
- Works for most buyers
- PMI until 20% equity
- Lower PMI rate than 3% tier
Mid-Range Down Payment
- Lower PMI cost
- Better interest rate
- Stronger offer in competitive markets
- Common for second homes
No PMI Zone
- Zero PMI from day one
- Best possible rate tier
- Lowest monthly payment
- Ideal for move-up buyers rolling equity
Why Conventional Is Often the Smart Choice
For buyers with good credit and stable income, conventional loans offer flexibility and long-term savings that other programs can’t match.
No Upfront MIP
Unlike FHA loans, there’s no upfront mortgage insurance premium on conventional loans. Keep more of your cash at closing.
PMI That Cancels
Once you hit 20% equity — through payments, appreciation, or both — PMI automatically cancels. FHA MIP can stay for the life of the loan.
Primary, Second & Investment
Conventional works for all property types — primary residences, vacation homes, and 1–4 unit investment properties. FHA covers primary only.
Higher Loan Limits
Conforming limits in 2025 reach up to $806,500 — higher than FHA limits in most Tennessee counties. Jumbo options available above that.
Flexible Property Condition
Conventional has fewer property condition restrictions than FHA. Fixer-uppers and older homes often sail through conventional underwriting without issue.
Faster Closings
Without government program overlays, conventional loans often close faster with fewer conditions — a real edge in East Tennessee’s competitive market.
Who Does Best with a Conventional Loan?
Conventional tends to outperform other programs in specific situations. Here’s who should strongly consider it.
Move-Up Buyers
Using equity from your current home as your down payment? Conventional is built for this — roll your existing equity into a larger or better home.
Credit-Strong Buyers
Credit score of 720+? Conventional gives you the best rates and lowest overall cost — often beating FHA by a significant margin over the life of the loan.
Second Home Buyers
Want a cabin in the Smokies? Conventional is one of the only programs that finances second homes with as little as 10% down.
Small Investor Buyers
Purchasing a duplex, triplex, or quad? Conventional handles 1–4 unit investment properties. DSCR programs are also worth comparing.
Fixer-Upper Buyers
Targeting a home that needs some work? Conventional’s looser property condition rules make it easier to close on homes that need TLC.
Long-Term Wealth Builders
With cancellable PMI and no lifetime MIP, conventional often costs less over the full loan life — a key advantage for buyers building net worth.
Which Loan Is the Better Fit?
Both programs serve different borrowers. Here’s the honest breakdown — and I’m always happy to run the numbers side by side.
| Feature | Conventional | FHA |
|---|---|---|
| Min. Down Payment | 3% (no income limit option) | 3.5% |
| Upfront Mortgage Insurance | None | 1.75% of loan amount |
| Monthly PMI / MIP | Cancels at 20% equity | Stays for life of loan (if < 10% down) |
| Min. Credit Score | 620+ (best rates at 720+) | 580+ (more flexible) |
| Max Loan Amount | $806,500 conforming | Lower (varies by county) |
| Property Condition | More flexible | Stricter requirements |
| Second Homes / Investment | Yes | Primary residence only |
| Best For | Good credit, move-up, long-term savings | Lower credit, first-timers, limited cash |
Getting Started Is Simpler Than You Think
Four steps from first conversation to getting your keys.
Quick Strategy Call
We review your credit, income, and goals in 10–15 minutes. You’ll know exactly where you stand before we hang up.
Pre-Approval Letter
We collect your documents and issue a strong pre-approval — typically within 24 hours of receiving everything.
Shop with Confidence
Your pre-approval shows sellers you’re serious. I’m available to run numbers on any home you’re considering.
Close & Get the Keys
We manage the loan process from contract to closing. You show up, sign, and celebrate.
Conventional Loan FAQs
The questions I hear most from buyers considering conventional.
What credit score do I need?
The minimum is typically 620, but you’ll get the best rates at 720 or higher. If you’re not there yet, I can often help you move the needle in 30–60 days before we apply.
When does PMI go away?
By law, your lender must cancel PMI when your balance reaches 78% of the original home value. You can also request removal at 80% if you’ve made on-time payments and meet the guidelines. For FHA, MIP often stays for the entire loan term if you put less than 10% down — a big difference.
Can I use gift funds for my down payment?
Yes — gift funds from family members are allowed with proper documentation. The specific rules vary based on how much you’re putting down. We’ll walk through the details during your consultation.
Can I use a conventional loan for a cabin in the Smokies?
Absolutely. Conventional is one of the best options for second homes in Sevierville, Pigeon Forge, and Gatlinburg — with as little as 10% down. I’ll make sure you’re structured correctly from the start so there are no surprises.
What’s the difference between conforming and jumbo?
Conforming conventional loans stay at or below the 2025 limit of $806,500. Anything above that is jumbo, which has slightly different guidelines and rates. I handle both — if you’re looking at a higher-priced home, let’s talk through your options.