BARRETT HENRY | THE NOW TEAM
Conventional Loan in Florida
Everything you need to know about using a Conventional Loan to buy a home in Florida. Expert guidance from Barrett Henry, REALTOR® at REMAX Collective.
How a Conventional Loan Works
A conventional loan is a mortgage that is not insured or guaranteed by a government agency (unlike FHA, VA, or USDA). Conventional loans are originated by private lenders and typically conform to guidelines set by Fannie Mae and Freddie Mac. For 2026, the conforming loan limit is $806,500 for a single-family home in all Florida counties — any amount above that is considered a jumbo loan with different qualification requirements.
Conventional loans offer the most flexibility of any mortgage product. Down payments start at 3% for first-time buyers (through Fannie Mae HomeReady or Freddie Mac Home Possible programs) and 5% for repeat buyers. If you put less than 20% down, you will pay private mortgage insurance (PMI), but unlike FHA's lifetime MIP, conventional PMI automatically drops off once your loan balance reaches 78% of the original purchase price — or you can request removal at 80%. PMI rates vary by credit score and down payment, typically ranging from 0.2% to 1.5% of the loan amount annually. A buyer with a 740+ credit score putting 10% down might pay $80-$120 per month on a $400,000 loan, while a buyer with a 660 score could pay $200-$350.
Barrett Henry, Broker Associate at REMAX Collective with 23+ years of real estate experience, recommends conventional loans for buyers with credit scores above 700 and at least 5% down. In competitive multiple-offer situations common in Tampa Bay's strongest neighborhoods, conventional financing is often preferred by sellers over FHA or USDA because of faster closings, fewer appraisal contingencies, and less red tape. Call (813) 733-7907 to discuss whether conventional is the right fit for your purchase.
Conventional Loan Eligibility Requirements
- Minimum credit score of 620, though the best rates and lowest PMI costs require 740+ (each 20-point tier affects your rate and PMI pricing)
- Down payment of 3% minimum for first-time buyers (HomeReady/Home Possible), 5% for repeat buyers, or 20% to avoid PMI entirely
- Debt-to-income ratio up to 45% back-end, with some lenders allowing up to 50% for borrowers with strong compensating factors (high credit score, significant reserves)
- 2026 conforming loan limit of $806,500 for all Florida counties — loans above this amount require jumbo qualification
- Private mortgage insurance (PMI) required if down payment is less than 20% — rates range from 0.2% to 1.5% annually based on credit score and loan-to-value ratio
- Stable employment and income documentation — W-2 employees need 2 years of tax returns; self-employed borrowers need 2 years of business and personal returns
- Cash reserves of 2-6 months of mortgage payments may be required depending on loan amount, number of properties owned, and credit profile
- Property appraisal must support the purchase price, though conventional appraisals are generally less restrictive than FHA or VA appraisals
Benefits of a Conventional Loan
Frequently Asked Questions About Conventional Loans in Florida
What is the conforming loan limit in Florida for 2026?
The 2026 conforming loan limit is $806,500 for a single-family home in every Florida county. This is the maximum loan amount for a conventional mortgage that conforms to Fannie Mae and Freddie Mac guidelines. Loans above this amount are classified as jumbo loans, which have stricter credit, income, and down payment requirements.
How do I get rid of PMI on a conventional loan?
PMI automatically drops off when your loan balance reaches 78% of the original purchase price through normal payments. You can also request PMI removal at 80% LTV by contacting your servicer — they may require a new appraisal showing your home has not lost value. If your home has appreciated, you can request removal even sooner based on current market value with an appraisal (typically at 75-80% of current value depending on the investor).
Is a conventional loan better than FHA for Florida buyers?
It depends on your credit score and down payment. Buyers with 700+ credit scores and 5-10% down almost always save money with conventional because PMI is cheaper than FHA MIP and drops off automatically. Buyers with scores below 680 or minimal savings often get better terms with FHA. Barrett recommends having your lender run both scenarios side by side — the total cost over the first 5-7 years is what matters, not just the monthly payment.
Can I buy an investment property with a conventional loan?
Yes. Conventional loans are the primary financing option for investment properties since FHA, VA, and USDA are all restricted to primary residences. Investment property conventional loans require 15-25% down payment, a credit score of 680+, and typically carry interest rates 0.5%-0.75% higher than primary residence rates. You will also need 6 months of cash reserves for each financed property you own.
What closing costs should I expect with a conventional loan in Florida?
Florida conventional loan closing costs typically run 2-4% of the purchase price. This includes lender origination fees, appraisal ($400-$600), title insurance (in most Florida counties, the seller traditionally pays for the owner's title policy), Florida doc stamps ($0.70 per $100), intangible tax ($0.20 per $100 on the mortgage), recording fees, and prepaid items. On a $400,000 purchase, expect $8,000-$16,000 in closing costs.
What credit score do I need for the best conventional loan rate?
A credit score of 740 or higher gets you the best conventional loan pricing — both the lowest interest rate and the cheapest PMI. Between 700-739, rates increase slightly. At 680-699, you will see noticeably higher rates. Below 680, conventional lending becomes expensive enough that FHA may actually be cheaper. Each 20-point tier in your credit score directly impacts your monthly payment and total loan cost.
Insider Tips from Barrett Henry
In a multiple-offer situation, conventional financing gives your offer an edge over FHA or USDA. Listing agents know that conventional appraisals are less restrictive, closings are faster (25-30 days vs. 35-45 for government loans), and there is less chance of the deal falling apart due to property condition issues. If you can go conventional, do it.
If you are putting less than 20% down, ask your lender about lender-paid PMI (LPMI). Instead of a monthly PMI payment, the lender raises your interest rate slightly and pays the PMI themselves. You get a lower monthly payment, and unlike borrower-paid PMI, you can deduct the full mortgage interest on your taxes. The trade-off is you cannot cancel it — but if you plan to refinance or sell within 5-7 years, LPMI often wins.
Florida homestead exemption saves up to $50,000 off your assessed property value for tax purposes. On a conventional purchase, file for homestead within 30 days of closing. Combined with Florida's Save Our Homes cap (assessed value cannot increase more than 3% per year after homestead), your property taxes stay manageable even as market values climb.
If your credit score is between 680 and 720, spend 30-60 days improving it before you apply. Paying down credit card balances to below 30% utilization, removing errors from your credit report, and avoiding new inquiries can move your score 20-40 points — potentially saving you thousands in interest and PMI over the life of the loan. Barrett can refer you to a credit optimization specialist if needed.
Questions About Conventional Loans in Florida?
Barrett Henry can connect you with trusted lenders and guide you through every step. Call (813) 733-7907 or fill out the form below.