Conventional Loans for First-Time Home Buyers (2026 Guide)

First-time buyers often have more conventional-loan options than they realize. Programs supporting low down payments do exist, and comparing conventional against FHA carefully is usually more useful than defaulting to one.

Who this may fit

Prospective buyers approaching their first purchase who want to understand realistic conventional-loan paths.

Key decision factors

Available down payment and reserves
Credit profile and DTI
Local property prices and county loan limits
How long you expect to keep the loan
PMI cost vs FHA mortgage-insurance cost

For more detail on these decisions, read the conventional loan requirements guide and the guide to PMI costs and removal.

Illustrative example

Common mistakes

Assuming FHA is always the right first-time buyer choice
Skipping the total-cost comparison between programs
Underestimating closing costs and reserves

Questions to ask a licensed loan officer

Can you show a total-cost comparison of conventional and FHA for my scenario?
Are any first-time buyer or down-payment assistance programs realistic here?
How does the pricing change at different credit tiers I'm close to?

Common questions

Can a first-time buyer get a conventional loan with a low down payment?

Yes. Some conventional programs allow low down payments for eligible borrowers, including Fannie Mae's HomeReady and Freddie Mac's Home Possible. Eligibility rules vary, and PMI typically applies below 20% down.

Do I need 20% down for a conventional loan?

No. Putting 20% down avoids PMI, but many conventional loans are made with less. The trade-off is PMI and a larger loan balance.

Is FHA or conventional better for first-time buyers?

It depends on credit, down payment, and how long you'll keep the loan. Ask a lender to compare the total cost of both, not just the monthly payment.

What costs should I budget for besides the down payment?

Closing costs, prepaid taxes and insurance, an escrow deposit, moving costs, and cash reserves. Your Loan Estimate lists the loan-related costs.

Choose your next step

Have a mortgage question?

Share a mortgage-planning request for review by Bolt Home Loans, or keep exploring your options here.

Continue planning

The planning request is not an application, approval, preapproval, rate quote, rate lock, or commitment to lend. Bolt Home Loans LLC, NMLS 2784913.

Sources

Primary sources relied on for this page. Check scope varies by entry; a source check is not a licensed or human compliance review.

CFPB — Owning a Home / Mortgages
Consumer Financial Protection Bureau · Status: Verified (see check notes) · Published/effective: living resource · Last checked: 2026-07-28
What was checked
General landing-page check only; not section-level validation. See exact CFPB PMI entries for scoped editorial checks.

Conventional loans for first-time home buyers