A conventional mortgage is a home loan that’s not government guaranteed or insured. conventional loan down payments are as low as 3%, but credit qualifications are tougher than government mortgages.
Fannie Mae and Freddie Mac – the two agencies responsible for establishing conventional loan guidelines – have introduced conventional mortgage loans with a 3% down payment. The new 3% down payment loan provides a potentially less expensive alternative to an FHA loan.
Conventional loans have had them since the 1990s. And some first-time home buyer programs offer down payment assistance that.