A conventional loan is any mortgage that isn't insured or guaranteed by a government agency (FHA, VA, USDA). Most U.S. mortgages are conventional, and they're the dominant choice for buyers with strong credit and at least 3-5% down. This 2026 guide breaks down the requirements, the loan limits, the PMI rules, and how conventional stacks up against FHA and VA for Hampton Roads buyers.
Key takeaways at a glance
- Conventional 97 requires 3% down with a 620+ score; most buyers put 5–20% down.
- 2026 conforming loan limit is $806,500 in most Virginia counties (higher in DC metro).
- PMI drops automatically at 78% LTV on conventional — unlike FHA where it usually sticks for life.
- Best for buyers with 700+ credit and at least 5% down; below that, FHA or VA often beats it.
- Conventional cash-out: up to 80% LTV. Conventional is the only option for true investment property purchases.
| Tier | Down Payment | PMI Required? | Best For |
|---|---|---|---|
| Conventional 97 | 3% | Yes — drops at 78% LTV | Solid credit, plan to stay |
| 5% down | 5% | Yes — drops at 78% LTV | Most common middle ground |
| 10% down | 10% | Yes — drops at 78% LTV | Slightly better PMI |
| 20% down | 20% | None | Best long-term cost |
| Jumbo | 10–20%+ | Sometimes | Above $806,500 in most VA counties |
In this guide
What is a conventional loan?
Any mortgage that's NOT insured or guaranteed by a federal agency. Most conventional loans conform to Fannie Mae and Freddie Mac standards, which lets the lender sell them on the secondary market. Above the conforming loan limit, you're in jumbo loan territory.
Requirements
- Credit score — 620 minimum; 740+ for best pricing
- Down payment — 3% (Conventional 97), 5%, 10%, or 20%+
- Debt-to-income — typically up to 45–50%
- Income documentation — 2 years W-2 / tax returns / pay stubs / bank statements
- Property type — owner-occupied, second home, OR investment property (FHA/VA can't do investment)
Private Mortgage Insurance (PMI)
If your down payment is less than 20%, conventional loans require PMI — but unlike FHA, PMI drops automatically at 78% LTV. You can also request removal at 80% LTV with an appraisal, or refinance to drop it sooner.
PMI rates vary based on credit score, LTV, and the specific PMI provider. Higher credit = lower PMI; smaller down payment = higher PMI.
Conforming loan limits in Virginia (2026)
$806,500 single-family in most Virginia counties, including Hampton Roads. Northern Virginia (DC metro) high-cost counties go up to $1.21M+. Above the limit you'll need a jumbo loan with stricter underwriting.
Conventional vs. FHA vs. VA
For Hampton Roads buyers:
- VA-eligible? VA almost always wins. VA guide.
- Credit 700+ with 5%+ down? Conventional usually beats FHA over the life of the loan because of PMI removal.
- Credit under 680 or limited savings? FHA usually beats conventional. FHA guide.
- Buying investment property? Conventional only — FHA and VA require owner-occupancy.
Frequently Asked Questions
What is the minimum down payment for a conventional loan?
3% with Conventional 97 (Fannie Mae HomeReady or Freddie Mac Home Possible). 5% standard. 20% to avoid PMI entirely.
What credit score do I need for a conventional loan?
620 minimum. 740+ for best rates and lowest PMI.
When does PMI drop off a conventional loan?
Automatically at 78% LTV based on the original amortization schedule. Can request earlier removal at 80% LTV with an appraisal.
What is the 2026 conforming loan limit in Virginia?
$806,500 for single-family homes in most Virginia counties, including Hampton Roads. Northern Virginia high-cost counties go higher (up to $1.21M+).
Can I use a conventional loan for investment property?
Yes — conventional is the only common loan type that allows pure investment property purchases. Down payment requirements are typically 15–25% for investment.
What is the difference between conventional and FHA?
Conventional is privately insured (PMI drops at 78% LTV). FHA is federally insured (MIP often lasts the life of the loan). Conventional is usually cheaper over time for buyers with 680+ credit.
Can sellers pay closing costs on a conventional loan?
Yes — up to 3% of purchase price with less than 10% down, 6% with 10–25% down, 9% with 25%+ down.
How long does a conventional loan take to close?
Typical 30–45 days from offer accepted, similar to FHA and VA.
Have a question about your home purchase?
Talk to a Hampton Roads buyer's agent or loan officer who can walk through your specific situation - no pressure, no obligation.
Sources & further reading
- Fannie Mae — Originating and Underwriting
- Freddie Mac — Single-Family
- FHFA — Conforming Loan Limits
- CFPB — Conventional loans
Information reflects 2025-2026 conditions and rules. Always confirm current details with the relevant agency, lender, or licensed professional before relying on any specific figure or rule.
About the Author
The VaHome Team is dedicated to providing expert real estate insights for Hampton Roads, Virginia. Contact us at (757) 777-7577 or tom@vahomes.com.
About the Hampton Roads Real Estate Market
Hampton Roads is one of the most dynamic real estate markets on the East Coast, anchored by the largest naval complex in the world at Naval Station Norfolk and home to roughly 120,000 active-duty, reserve, and civilian Department of Defense personnel. The region spans seven cities — Virginia Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, Hampton, and Newport News — plus the Peninsula communities of Williamsburg, Yorktown, and Poquoson, with each market carrying its own personality, school district, and price profile.
Buying or selling here means thinking about more than just a house. Tidewater geography means flood zones, hurricane preparation, and waterfront premiums matter. Military presence means BAH affordability, PCS season inventory crunches (May through August), and VA loan eligibility are top of mind for a meaningful share of every neighborhood. School quality varies block by block, especially across the seven independent city school divisions, and is often the deciding factor for relocating families.
Why Buyers and Sellers Choose VaHome
The VaHome Team — Tom and Dariya Milan with LPT Realty — focuses on the Hampton Roads region with deep expertise in military relocation, VA financing, and the trade-offs that local buyers actually face. From listing strategy that gets your home in front of the right relocating buyer to buyer representation that respects your BAH cap and PCS timeline, the team treats every transaction as a long-term relationship. The site is built to make decisions clearer: BAH-aware search, drive-time mapping to every major installation, neighborhood guides written by people who live here, and a calculator that shows real monthly cost — taxes, insurance, HOA, and PMI included — instead of a teaser headline number.
Plan Your Next Move
Whether you are buying your first home with a VA loan, moving up while your kids transition between school districts, or selling a Hampton Roads property to relocate to your next duty station, the resources on this site are organized around the questions you are actually asking. Browse listings filtered by base proximity, paygrade-aware BAH cap, and commute time. Read neighborhood guides for Virginia Beach, Norfolk, Chesapeake, Suffolk, Hampton, Newport News, Williamsburg, and the Peninsula communities. Use the mortgage calculator to compare conventional, FHA, VA, USDA, and jumbo loan scenarios side by side. When you are ready to talk, the contact form goes directly to a specialist who knows the area, the lenders, and the timing.