A conventional loan is a mortgage not backed by a government program, offered to buyers with solid credit and stable income. Down payments can be as low as 3%, and there's no mortgage insurance once you reach 20% equity. It's the most common loan in the Tri-Cities. Sam Timlick (NMLS# 2776469) helps you compare it against FHA and VA. Call 253-431-2630.
What is a conventional loan?
A conventional loan is any mortgage not insured or guaranteed by a government agency like the VA, FHA, or USDA. Most conventional loans follow guidelines set by Fannie Mae and Freddie Mac, which makes them widely available and competitively priced. For buyers with good credit and steady income, it's usually the most flexible and cost-effective option — the workhorse of the Tri-Cities market.
Who is a conventional loan good for?
Conventional financing rewards strong credit and stable income with better pricing. If you have a solid credit history and can put down 5% or more, a conventional loan often costs less over time than FHA — especially because the mortgage insurance can be removed once you reach 20% equity. It's also the program to use for second homes and investment properties, which government loans don't cover.
How much do I need to put down?
Less than people think. Qualified buyers can put down as little as 3% on a conventional loan. Putting down 20% lets you avoid private mortgage insurance (PMI) entirely, but you don't have to wait until you have 20% to buy — PMI on a conventional loan can be removed later as your equity grows, unlike the lifetime mortgage insurance on many FHA loans.
Conventional loans in the Tri-Cities
With the regional median around $288,000 in early 2026, conventional loans cover the vast majority of Tri-Cities purchases comfortably within conforming loan limits. For higher-priced homes, jumbo financing is available too. I'll confirm the current conforming limit and the right structure for your purchase.
Pros and cons
Advantages
- Down payments as low as 3%
- No mortgage insurance with 20% down — and PMI is removable
- Available for second homes and investment properties
- Often lower long-term cost for strong-credit buyers
- No upfront government funding/guarantee fee
Things to weigh
- Stricter credit and income requirements than FHA
- PMI applies until you reach 20% equity
- Conforming loan limits apply (jumbo above that)
- Less forgiving of recent credit issues