A Conventional 95 Loan allows qualified homebuyers to purchase a primary residence with as little as 5% down, while keeping the flexibility and long-term savings advantages of a conventional mortgage.
Unlike FHA loans, mortgage insurance on a Conventional 95 loan is not permanent and may be removed once sufficient equity is reached—making it a popular option for buyers with solid credit and moderate savings.
What Is a Conventional 95 Loan?
A Conventional 95 Loan is a conventional mortgage that allows financing of up to 95% of the home’s value, requiring a minimum 5% down payment.
Key characteristics:
- Backed by Fannie Mae or Freddie Mac
- Designed for primary residences only
- Offers competitive pricing compared to government loans
- Mortgage insurance (PMI) can be removed when eligible
This loan is often used by first-time and move-up buyers who want lower upfront costs without long-term mortgage insurance.
Top Benefits of a Conventional 95 Loan
1. Low Down Payment
Buy with just 5% down, helping you preserve cash for reserves, furnishings, or future plans.
2. Removable PMI
Unlike FHA loans, PMI on a Conventional 95 loan can be canceled once you reach adequate equity, reducing long-term costs.
3. Competitive Long-Term Cost
No lifetime mortgage insurance and pricing that often improves as equity increases.
4. Broad Property Eligibility
Available for:
- Single-family homes
- Condos
- Townhomes (subject to approval)
5. Efficient Process with Modern Technology
Loan Factory’s MOSO AI platform helps streamline pricing, documentation, and loan tracking.
FHA vs Conventional 95 vs Conventional 97 (Quick Comparison)
Feature | FHA Loan | Conventional 95 | Conventional 97 |
| Minimum Down Payment | 3.5% | 5% | 3% |
| Max LTV | 96.5% | 95% | 97% |
| Credit Score (typical) | 580+ | 620+ | 620+ |
| Income Limits | None | None | May apply |
| Occupancy | Primary only | Primary only | Primary only |
| Mortgage Insurance | MIP (often long-term) | PMI (removable) | PMI (removable) |
| Best For | Lower credit profiles | Good credit + moderate savings | First-time buyers |
Program eligibility and pricing depend on full underwriting review.
How a Conventional 95 Loan Works (Illustrative Example)
Purchase scenario (example only):
- Purchase price: $400,000
- Down payment (5%): $20,000
- Loan amount: $380,000
Mortgage insurance is based on credit profile and risk factors and may be removed once eligibility requirements are met.
Example shown for educational purposes only. Actual terms depend on underwriting.
Who Typically Qualifies for a Conventional 95 Loan?
While guidelines vary by lender, borrowers often need:
- Credit score of 620+ (higher scores may improve pricing)
- Stable income and employment history
- Acceptable debt-to-income ratio
- Funds for down payment and closing costs
- Owner-occupied primary residence
Borrowers with income at or below 80% of Area Median Income (AMI) may also explore programs like HomeReady® or Home Possible®.
Why Choose Loan Factory for a Conventional 95 Loan?
Loan Factory combines technology, scale, and expert guidance to help buyers make smarter mortgage decisions.
Why Homebuyers Choose Loan Factory:
Ready to Buy with 5% Down?
A Conventional 95 Loan offers a strong balance of affordability, flexibility, and long-term savings—especially when paired with the right lender strategy.
Apply online: https://www.LoanFactory.com/apply
Check rates: https://www.LoanFactory.com/quote
Talk to an advisor: (660) 333-3333
This content is for informational purposes only and not a commitment to lend. Loan terms depend on credit, income, property, underwriting, and investor guidelines.
FAQ: Conventional 95 Loans
