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Conventional Loans: A Complete Guide for Homebuyers in North Atlanta

  • Writer: Josh Green
    Josh Green
  • Sep 8, 2025
  • 2 min read

Updated: Sep 15, 2025

Loan document and house keys

Conventional loans are one of the most common mortgage options in the United States. Unlike government-backed loans (FHA, VA, USDA), conventional loans are offered by private lenders such as banks, credit unions, and mortgage companies. They are popular because of their flexibility, relatively low down payment options, and wide availability.

Whether you’re a first-time homebuyer or an experienced buyer, understanding conventional loan requirements can help you determine if this financing option is the right fit for you.


What Is a Conventional Loan?

A conventional loan is a mortgage that is not insured or guaranteed by the U.S. government. Because the loan is not government-backed, the lender takes on more risk. This typically means:

  • Higher credit score requirements compared to FHA or USDA loans

  • Stricter debt-to-income (DTI) limits

  • Potentially higher loan amounts than government loan programs allow


Conventional Loan Requirements

Here are the typical requirements for qualifying:

  • Credit Score: Minimum 620

  • Debt-to-Income Ratio (DTI): Maximum 45% in most cases

  • Down Payment: As low as 3%

    • Important: Until you reach 20% equity (80% loan-to-value ratio), you must pay Private Mortgage Insurance (PMI).

    • Example: Buying a $500,000 property with 3% down ($15,000) leaves a loan balance of $485,000. You’ll pay PMI until the loan balance is reduced to $400,000. At that point, you can request PMI removal.

  • Loan Limits: In most counties, the maximum conventional loan is $806,500 (higher in certain high-cost areas).


Key Features of Conventional Loans

  • ✅ Can be used for primary homes, second homes, or investment properties

  • ✅ Available as fixed-rate or adjustable-rate mortgages (ARM)

  • ✅ May require a waiting period after bankruptcy or foreclosure before qualifying again


Conventional Loans vs. Government Loans

While conventional loans are widely used, they differ from government-backed programs in key ways:

  • FHA Loans

    • Minimum 580 credit score with 3.5% down

    • Mortgage insurance required for the life of the loan (unless refinanced)

    • Property must meet strict FHA appraisal standards

  • VA Loans

    • Available to eligible military service members, veterans, and certain spouses

    • Often no down payment and no PMI

    • Must be used for a primary residence only

  • USDA Loans

    • For low-to-moderate-income buyers in designated rural areas

    • No down payment required

    • Includes upfront and annual guarantee fees


Summary: Is a Conventional Loan Right for You?

Conventional loans are often the best choice for buyers with:

  • Strong credit (620+)

  • Stable income and manageable debt levels

  • Ability to make at least a 3% down payment

They offer more flexibility than government loans, especially for investment or vacation properties. However, if your credit score is lower or you need minimal upfront costs, FHA, VA, or USDA loans may be better alternatives.


💡 Tip: Every buyer’s financial situation is unique. Meeting with a lender can help you compare loan options and get pre-approved, so you’re ready to make an offer when the right property comes along.


Need Help Finding the Right Loan?

At CGreen Real Estate, we work with trusted local lenders and can connect you with financing options that fit your needs. Contact us today to learn more and explore our buyer resources.



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