Conventional Loans in NC, SC & GA
Quick answer
What is a conventional loan?
A conventional loan is a mortgage that is not insured by the government, usually following Fannie Mae or Freddie Mac guidelines. Buyers with solid credit (typically 620 or higher) can put down as little as 3% on some options, and private mortgage insurance can be removed once you reach enough equity.
Conventional loans are the most common type of mortgage, and they are flexible. If you have solid credit, you can often put down as little as 3%, and the mortgage insurance does not last forever like it can on FHA. They also work for second homes and investment properties, which government loans do not.
Conventional at a glance.
| Minimum down payment | 3% on certain first-time buyer and lower-income options; 5% is common otherwise |
|---|---|
| Typical minimum credit | Around 620 |
| Mortgage insurance | PMI required under 20% down; can be cancelled at 20% equity on request and ends automatically at 22% under federal law |
| Occupancy | Primary residence, second home, or investment property |
| Loan limits | 2026 baseline conforming limit of $832,750 for a one-unit home in our NC, SC, and GA counties; larger loans are jumbo |
| Best for | Buyers with good credit who want flexibility and mortgage insurance that goes away |
General guidelines only. Lenders can add their own requirements, and program rules change.
How it works.
Conventional loans follow Fannie Mae and Freddie Mac guidelines, and most are approved through their automated underwriting systems. The typical minimum credit score is around 620. First-time buyer programs allow as little as 3% down; many buyers put down 5% to 20%. If you put down less than 20%, you will pay private mortgage insurance (PMI), but you can request to cancel it once you reach 20% equity based on the original value, and it ends automatically at 22%. Conforming loan limits apply and change yearly.
How PMI pricing works
PMI cost depends on your credit score, down payment, and debt-to-income ratio. A higher score and a larger down payment lower it. PMI is usually paid monthly, but some buyers pay it upfront as a single premium or have the lender pay it in exchange for a slightly higher rate. I compare these options when they make sense.
Because PMI can be removed later, conventional loans often cost less over the life of the loan than FHA for buyers with good credit, even when the rates look similar on day one.
Conforming loan limits
The Federal Housing Finance Agency sets the conforming loan limit each year. For 2026, the baseline limit for a one-unit home is $832,750, which applies across our NC, SC, and GA markets. Loans above the limit are jumbo loans with different rules. Two to four unit properties have higher limits.
Debt-to-income and reserves
Automated underwriting can approve debt-to-income ratios up to about 50% with strong compensating factors, though many files land lower. Reserves (savings left after closing) are often not required for a primary residence but help your approval, and they are usually required for second homes and investment properties.
Who it's best for.
Buyers with good credit who want flexibility and mortgage insurance that eventually goes away.
- Credit scores in the high 600s and above
- Buyers putting 5% to 20% down who want PMI to come off later
- Second home or investment property purchases
- Buyers who want to avoid FHA's upfront premium
When another loan may be better.
- Scores below about 620, where FHA is usually the better path
- Higher debt-to-income ratios that FHA can handle more easily
- Eligible veterans, who should compare VA's $0 down and no monthly MI
- Loan amounts above the conforming limit, which require a jumbo loan
How the process works, start to finish.
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1
Review credit and down payment
Your score and down payment drive both approval and PMI cost, so we start there.
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2
Automated underwriting
I run your file through Fannie Mae or Freddie Mac automated underwriting to get findings before you shop.
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3
Compare PMI and pricing options
We compare monthly PMI, single premium, and down payment levels to find the best overall cost.
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4
Appraisal or waiver
Most purchases need an appraisal. Some files may be eligible for an appraisal waiver based on automated findings.
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5
Underwriting and closing
The underwriter clears conditions, you review your Closing Disclosure, and you close with your attorney.
What you'll typically need.
- Pay stubs covering 30 days
- Two years of W-2s or tax returns
- Two months of bank statements
- Photo ID
- Documentation for any gift funds
Common reasons files get denied or delayed.
- Score dropping below the minimum after new credit inquiries
- Debt-to-income ratio above what automated underwriting approves
- Recent bankruptcy or foreclosure inside the waiting period
- Unsourced deposits in bank statements
- Condo projects that do not meet Fannie Mae or Freddie Mac standards
What's different in the Carolinas and Georgia.
- The 2026 baseline conforming limit of $832,750 applies in our NC, SC, and GA counties. Buyers in higher-priced areas like parts of Charleston, Lake Norman, or north Atlanta suburbs may cross into jumbo territory.
- Coastal condos in places like Myrtle Beach and the Charleston area can face extra project review for insurance and reserves. We check the condo project early.
- North Carolina, South Carolina, and Georgia all use attorneys to close real estate transactions, so a local closing attorney (not just a title company) will handle your closing, title work, and recording. Build their fee and schedule into your timeline.
- State housing agency programs in all three states offer conventional options with down payment assistance for eligible buyers, offered only through participating lenders that I confirm for your file. The Chenoa Fund, the assistance I can place, pairs with FHA rather than conventional loans.
Helpful tools
Related guides
Common questions: Conventional.
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When does the mortgage insurance come off a conventional loan?
You can request cancellation once you reach 20% equity based on the original value with a good payment history, and it terminates automatically at 22% equity under the Homeowners Protection Act.
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Is conventional better than FHA?
It depends on your credit and down payment. Conventional often costs less long term for stronger credit because PMI can be removed. FHA is more forgiving while you are building credit. I compare both for your numbers.
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What credit score do I need for a conventional loan?
Around 620 is the typical minimum. Higher scores get better pricing and cheaper PMI, so moving from the low 600s to the 700s can make a real difference.
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Can I put 3% down on a conventional loan?
Yes, on certain options. Fannie Mae and Freddie Mac allow 3% down for eligible first-time buyers and on their lower-income programs like HomeReady and Home Possible. Otherwise 5% is common.
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What is the conforming loan limit in 2026?
The 2026 baseline conforming limit for a one-unit home is $832,750, set by the Federal Housing Finance Agency. That applies across our NC, SC, and GA markets. Above that, you need a jumbo loan.
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Can I use a conventional loan for a rental or vacation home?
Yes. Unlike FHA, VA, and USDA, conventional loans can finance second homes and investment properties, usually with larger down payments and reserves.
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Do I need 20% down to avoid PMI?
On a conventional loan, yes, 20% down avoids PMI. But putting less down and paying PMI for a few years can still make sense if it gets you into a home sooner. I can show you the math.
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Can the seller pay my closing costs on a conventional loan?
Yes, within limits based on your down payment and occupancy. For a primary residence, it ranges from 3% of the price with less than 10% down up to 9% with 25% or more down.
Sources: Fannie Mae Selling Guide; Freddie Mac Seller/Servicer Guide; FHFA 2026 conforming loan limits; Homeowners Protection Act (PMI cancellation).
Last reviewed September 2026 by Keith Lopez, NMLS #2814077.
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Markets where I help buyers with this
A note on program availability & disclosures
Program eligibility, guidelines, and pricing are set by the applicable investor, agency, or program (FHA, VA, USDA, Fannie Mae, Freddie Mac, and others) and are subject to change without notice. Not all applicants will qualify. This information is for educational purposes only and is not a commitment to lend or a guarantee of approval, rate, payment, or closing date. It is not tax or legal advice. Equal Housing Opportunity.
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Keith Lopez, NMLS #2814077 | NEXA Mortgage, LLC, NMLS #1660690 | Licensed in NC, SC & GA | Equal Housing Opportunity