Conventional loan

A mortgage not insured by FHA/VA/USDA, conforming to Fannie Mae or Freddie Mac guidelines.

Conventional loans are the standard for investors. Rental property requires 20-25% down (15% sometimes available on first investment property). Rates run slightly higher than owner-occupant. PMI required below 20% but drops off automatically at 78% LTV. Conventional loans cap at the conforming loan limit (varies by county, $766,550 in 2024 baseline). Above that you need a jumbo loan with stricter requirements. Most rental purchases happen with conventional financing until DSCR loans or commercial financing become more efficient at scale.