Conventional loans remain the most popular mortgage choice in Georgia, offering competitive rates, flexible terms, and no government backing requirements. If you have good credit and stable income, a conventional loan might be your best path to homeownership in 2026.
This guide covers everything you need to know about qualifying for a conventional mortgage in Georgia"”from credit scores to down payments to income requirements.
What Is a Conventional Loan?
A conventional loan is any mortgage that's not backed by a government agency (like FHA, VA, or USDA). These loans are originated by private lenders and often sold to Fannie Mae or Freddie Mac, the government-sponsored enterprises that set most conventional loan standards.
Conventional vs. Government Loans
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Conventional: Private lender, follows Fannie Mae/Freddie Mac guidelines
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FHA: Government-insured, more flexible qualification
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VA: For veterans, zero down payment
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USDA: For rural areas, zero down payment
2026 Conventional Loan Limits in Georgia
Conventional loans have maximum amounts based on county:
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Standard limit (most Georgia counties): $766,550
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Loans above this amount: Require jumbo financing
Conventional Loan Requirements
Credit Score Requirements
Your credit score significantly impacts your conventional loan options:
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Minimum: 620 (for most lenders)
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3% down payment: Typically requires 620+ credit score
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Best rates: 740+ credit score
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PMI rates: Significantly better with 720+ scores
Score Impact on Rates
The difference between credit score tiers can mean thousands of dollars:
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760+: Best available rates
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700-759: Slightly higher rates
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660-699: Noticeably higher rates
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620-659: Highest conventional rates, limited options
If your score is below 700, consider improving your credit before applying.
Down Payment Requirements
Conventional loans offer flexibility in down payment:
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Minimum: 3% for first-time buyers (Conventional 97, HomeReady, Home Possible)
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Standard: 5% for most borrowers
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To avoid PMI: 20%
Low Down Payment Programs
Conventional 97:
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3% down payment
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At least one borrower must be first-time buyer
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Single-family primary residence only
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PMI required
HomeReady (Fannie Mae):
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3% down payment
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Income limits apply (typically 80% of area median income)
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Reduced PMI rates
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Homebuyer education required
Home Possible (Freddie Mac):
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3% down payment
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Income limits apply
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Reduced PMI rates
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Flexible sources for down payment
Private Mortgage Insurance (PMI)
If you put down less than 20%, you'll pay PMI:
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Monthly cost: 0.3% - 1.5% of loan amount annually
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Factors affecting PMI: Credit score, down payment, loan amount
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Example: On a $300,000 loan with 5% down and 720 credit: ~$150-200/month
PMI Removal
Unlike FHA mortgage insurance, conventional PMI can be removed:
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Automatic cancellation: When you reach 22% equity based on original value
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Request cancellation: When you reach 20% equity
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New appraisal: May allow early removal if home has appreciated
Debt-to-Income Ratio (DTI)
Your DTI measures monthly debt payments relative to gross income:
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Maximum DTI: 43-45% for most conventional loans
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With strong compensating factors: Up to 50% in some cases
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Ideal DTI: Under 36%
Calculating DTI
Add up monthly debts:
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New mortgage payment (principal, interest, taxes, insurance)
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HOA fees
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Car payments
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Student loans
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Credit card minimum payments
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Other loan payments
Divide by gross monthly income.
Income and Employment Requirements
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Employment history: Typically 2 years in same field
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Income documentation: Pay stubs, W-2s, tax returns
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Self-employed: 2 years tax returns, see our self-employed guide
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Gaps in employment: Must be explained with documentation
Property Requirements
Conventional loans can finance:
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Single-family homes
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Condos (must meet Fannie Mae/Freddie Mac condo requirements)
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Townhouses
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Multi-family (2-4 units) if owner-occupied
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Second homes (higher down payment required)
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Investment properties (typically 15-25% down)
Conventional Loan Types
Fixed-Rate Mortgages
Most popular option:
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30-year fixed: Lowest monthly payment, most interest over time
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20-year fixed: Balance of payment and payoff speed
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15-year fixed: Higher payments, significant interest savings
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10-year fixed: Fastest payoff, highest payments
Adjustable-Rate Mortgages (ARMs)
Lower initial rates that adjust later:
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5/1 ARM: Fixed for 5 years, then adjusts annually
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7/1 ARM: Fixed for 7 years, then adjusts annually
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10/1 ARM: Fixed for 10 years, then adjusts annually
Consider an ARM if you plan to sell or refinance before the adjustment period.
The Conventional Loan Process
Step 1: Pre-Approval
Get pre-approved before house hunting:
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Submit income and asset documentation
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Credit check
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Receive pre-approval letter stating your budget
Step 2: House Hunting
Work with a real estate agent to find your home. Your pre-approval letter shows sellers you're serious.
Step 3: Offer and Contract
Submit an offer, negotiate terms, and sign the purchase contract.
Step 4: Full Application
Submit complete documentation to your lender:
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Purchase contract
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Updated income verification
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Asset statements
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Employment verification
Step 5: Processing and Underwriting
The lender verifies all information:
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Appraisal ordered
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Title search conducted
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Income and employment verified
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Underwriter reviews and approves (or requests conditions)
Step 6: Closing
Review and sign final documents, pay closing costs, get your keys.
Conventional Loan Advantages
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No upfront mortgage insurance fee (unlike FHA)
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PMI cancellation once you reach 20% equity
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Flexible property types including second homes and investments
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No location restrictions (unlike USDA)
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Competitive rates for good credit borrowers
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Higher loan limits than FHA
Conventional Loan Disadvantages
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Stricter credit requirements than FHA
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PMI costs with less than 20% down
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May require more documentation
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Less flexible for lower credit scores or higher DTI
Conventional vs. FHA: Which Is Better?
Compare based on your situation:
Choose Conventional If:
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Credit score is 680+
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You can put down 10-20%
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You want PMI to cancel eventually
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You're buying a condo or investment property
Choose FHA If:
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Credit score is 580-679
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DTI is higher (45-50%)
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Recent credit issues (bankruptcy, foreclosure)
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You only have 3.5% down and lower credit
Using Down Payment Assistance with Conventional Loans
Many Georgia down payment assistance programs work with conventional loans:
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Georgia Dream program funds can cover conventional down payment
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HomeReady and Home Possible programs allow 100% of down payment from gifts or assistance
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Check local county and city programs
Georgia Closing Costs for Conventional Loans
Expect 2-4% of purchase price in closing costs. See our detailed Georgia closing costs breakdown.
Tips for Conventional Loan Approval
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Boost your credit score before applying"”small improvements can mean better rates
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Save for a larger down payment to avoid or reduce PMI
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Keep debt low"”avoid new credit or large purchases before closing
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Document everything"”keep records of deposits and financial changes
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Stay employed"”don't change jobs during the loan process if possible
Next Steps
Ready to pursue a conventional loan in Georgia? Start by checking your credit score and calculating your DTI. If your numbers are strong, connect with a lender to get pre-approved. If you need to improve your profile, take a few months to boost your credit and save for a larger down payment.
For alternatives, explore USDA loans (if buying rural), VA loans (if you're a veteran), or first-time buyer grants for additional assistance.
Looking at alternative housing types? Read our guide to What Counts as a Manufactured Home in Georgia?.
Learn more about What Are HOA Fees and Why Do Lenders Care? to understand how HOA fees factor into your overall mortgage qualification.
