Conventional Loan Guide: Colorado and Florida Buyers (2026)

Conventional loans are the most flexible, most widely used mortgage product in America — and in 2026, understanding how they work is foundational for buyers in Colorado and Florida. "Conventional" means not government-backed — not FHA, VA, or USDA. Conventional loans are originated by private lenders and typically sold to Fannie Mae or Freddie Mac, who set the underwriting standards. Within conventional, there are multiple programs (standard, HomeReady, HomePossible, high-balance, jumbo) that serve different buyer profiles. Here's the complete 2026 picture. Conventional Loan Basics Credit score minimum: 620 (most lenders); best pricing at 720–740+ Down payment options:

3% (HomeReady / HomePossible for qualifying income buyers) 5% (most buyers' standard entry point) 10%, 15%, 20% (increasing options with PMI reduction/elimination) 20%+ (no PMI)

PMI: Required when LTV exceeds 80% (less than 20% down). Cancels automatically at 80% LTV — no refinance required. Loan limits: Up to county conforming limits ($832,750–$1,249,125 depending on county and state). Property types: Primary residence, second home, investment property (with different requirements for each). DTI: Typically up to 45%; some programs allow 50% with compensating factors. Conventional Programs Explained Standard Conventional The baseline program for buyers with 5–20%+ down and 680+ credit. Most widely used. PMI at various rates depending on LTV and credit score. HomeReady (Fannie Mae) For buyers at or below 80% of area median income:

3% minimum down Reduced PMI rates compared to standard conventional Allows non-occupant co-borrower income Allows rental income from ADU or boarder to count toward income First-time homebuyer education required

Who it serves: Moderate-income buyers in both Colorado and Florida who fall at or below 80% AMI. In Colorado, that's often $80,000–$100,000/year for a couple in most front-range counties. HomePossible (Freddie Mac) Near-identical to HomeReady — 3% down, reduced PMI, income limits at 80% AMI. Slightly different qualification nuances. We run both and recommend whichever produces better terms. High-Balance Conventional For loan amounts between the national conforming baseline and the local county limit (up to $1,249,125 in Colorado's highest-cost counties). Same qualification standards as standard conventional but available at larger loan amounts without jumbo pricing. Colorado examples: A $900,000 purchase in Eagle County with 20% down produces a $720,000 loan — inside the $1,249,125 high-balance conforming limit. Standard underwriting applies. Florida examples: A $720,000 purchase in Broward County with 10% down produces a $648,000 loan — inside the $832,750 Broward conforming limit. PMI: The Real Cost of Under 20% Down Private mortgage insurance is not a loss — it's the cost of buying sooner. Here's what it actually costs: Credit ScoreLTV 95% (5% down)LTV 90% (10% down)LTV 85% (15% down)760+~0.28%/yr~0.19%/yr~0.13%/yr720–759~0.40%/yr~0.27%/yr~0.19%/yr680–719~0.58%/yr~0.39%/yr~0.27%/yr On a $500K loan at 720 credit with 5% down: 0.40% × $475K = $1,900/year = $158/month. This drops automatically when your balance reaches 80% of the original value — no action required. When Conventional Beats FHA in Colorado and Florida Credit score 720+: Conventional PMI at this tier is meaningfully cheaper than FHA's lifetime 0.55% MIP. Buying a condo: Far more condos are eligible for conventional than FHA or VA. Florida especially — many buildings with warrantability issues for government loans work fine with conventional. Competitive markets: Conventional offers are generally stronger than FHA in multiple-offer situations because conventional appraisals have fewer property condition requirements. Long-term hold: Conventional PMI automatically removes at 80% LTV. FHA MIP runs for the life of the loan on 30-year loans with under 10% down. Over a 7–10 year hold, conventional wins. When FHA Beats Conventional Credit 580–679: FHA pricing and qualification standards are more favorable at these scores. Very tight DTI: FHA allows up to 50–55% DTI with compensating factors; conventional's ceiling is typically 45%. Limited savings: At 3% down, both HomeReady and FHA allow very low entry points — but FHA is more accessible for buyers below 680 credit. Get a Conventional Loan Quote We close conventional loans across all 67 Colorado counties and Florida statewide. Contact Tayton Capital or apply now. 📧 tj@taytoncapitalllc.com · 📞 970-708-9624 Frequently Asked Questions What is the minimum down payment on a conventional loan? 3% with HomeReady or HomePossible (income limits apply). 5% standard. 20% to avoid PMI. Does conventional PMI go away automatically? Yes — conventional PMI is required to be canceled automatically when your LTV reaches 80% of the original purchase price. You can also request cancellation when your balance reaches 80% of current appraised value. Can I use conventional for investment property in Colorado? Yes — 15% down for single-family, 25% for 2–4 unit. Up to 10 financed properties with Fannie/Freddie. See our investment property guide for full details. Is conventional or FHA better for a first-time buyer with 650 credit? At 650 credit, FHA typically wins — lower rate premium and more flexible qualification standards. At 680+, it becomes situation-dependent. At 720+, conventional usually wins.