In short
A conventional loan is simply a mortgage without government backing — no FHA, VA, or USDA involved. It's the route I recommend most often for Tampa Bay buyers with reasonably solid credit, partly because its mortgage insurance can eventually go away instead of sticking around for the life of the loan.
Reviewed by Ian Anderson, NMLS #1849097 · Last updated June 27, 2026
Is a conventional loan better than FHA for buyers in Tampa Bay?
It often comes down to your credit and your down payment. If you have solid credit, a conventional loan can beat FHA because its mortgage insurance is usually cheaper and, unlike FHA, it falls off automatically once you reach 20% equity. FHA can be the better call when credit is lower or your debt ratios are tight. I'll run both side by side with real Tampa Bay numbers, including our higher Florida insurance and taxes, so you can see the true monthly difference before you decide.
Key takeaways
Conventional loans are the workhorse of home financing, and for good reason. They're flexible, widely available, and open to many buyers with as little as 3% down. I'm Ian Anderson, and I'll help you decide whether a conventional loan is your best fit and structure it so you keep more money in your pocket.
Why Conventional Loans Are So Popular
A conventional loan is any mortgage not backed by a government program like FHA, VA, or USDA. It's the most common loan in the country because it's flexible and fits a huge range of buyers. I help buyers across Tampa, St. Petersburg, Sarasota, and the surrounding area use conventional financing for primary homes, second homes, and investment properties.
How Much Do You Need Down?
The old myth is that conventional means 20% down. It doesn't. Many buyers put down:
- 3% down through programs like Fannie Mae's HomeReady or Freddie Mac's Home Possible
- 5% to 10% down to lower the monthly payment and reduce mortgage insurance
- 20% down to skip mortgage insurance entirely
If you put down less than 20%, you'll pay private mortgage insurance (PMI), but here's the good news that FHA can't match: conventional PMI drops off automatically once you reach 20% equity. That can save you real money over the life of the loan.
Conventional Loans and Florida Realities
In Tampa Bay, your payment is more than principal and interest. Florida property insurance and property taxes are significant, and they affect your debt-to-income ratio, which affects how much home you qualify for. I build accurate insurance and tax estimates into your pre-approval from the start. I also know which carriers and condo associations tend to create headaches, so we avoid surprises during underwriting.
Loan Limits and Your Credit
For 2025, the conventional loan limit in most of the Tampa Bay area is in the high $700,000s for a single-family home. Above that, you move into jumbo territory, which I also handle. Your credit and down payment shape which conventional options fit you best — and your rate depends on your situation and the day's market, so reach out and I'll price it for real.
Who Conventional Loans Fit Best
- Buyers with credit scores generally in the 620-plus range
- Buyers who want PMI that eventually disappears
- Move-up buyers selling one home while buying another
- Buyers purchasing a second home or investment property
My Approach
I'll never steer you into a loan because it's easier for me. I compare your real options, explain the trade-offs in plain English, and structure your conventional loan to keep your closing costs lean and your payment honest. That transparency is why my clients refer their friends and family.
Quick facts
- Loan type
- Not government-insured (conforming)
- Typical minimum credit score
- Generally around 620+
- Typical minimum down payment
- As low as 3% for eligible buyers
- Mortgage insurance
- PMI required under 20% down; removable at 20% equity
- Occupancy
- Primary, second home, or investment
- Loan limits
- Conforming limits change annually — ask me for current figures
Is this loan right for you?
Who it's for
- Buyers whose credit sits around 620 or better
- Anyone who likes the idea of mortgage insurance that disappears at 20% equity
- Move-up buyers, second-home shoppers, and plenty of investors
- Buyers bringing anywhere from 3% down to well over 20%
Who it may not fit
- Buyers working through recent credit trouble — FHA is often the kinder path
- Borrowers carrying heavy monthly debt who need more forgiving ratios
Pros and cons
Pros
- Eligible buyers can start with as little as 3% down
- PMI drops off at 20% equity instead of lasting the life of the loan
- A familiar, widely accepted loan that keeps offers clean in a competitive market
- One loan type that covers primary homes, second homes, and investment properties
Trade-offs to weigh
- Credit expectations run higher than FHA
- Put down less than 20% and PMI rides along until you build the equity to remove it
Frequently asked questions
What credit score do I need for a conventional loan?
Most conventional loans want a score of 620 or higher. Your exact rate and mortgage insurance cost depend on your full picture and the day's market — reach out and I'll price it for real, and tell you whether a small credit improvement is worth waiting for.
How do I get rid of PMI on a conventional loan?
Conventional PMI automatically cancels once you reach 22% equity based on the original value, and you can request removal at 20%. Rising home values in Tampa Bay can get you there faster than you'd expect.
Can I use a conventional loan for an investment property?
Yes. Conventional financing is a common choice for investment properties, though you'll typically need more down, often 15% to 25%. If qualifying with tax returns is tricky, I can also discuss DSCR loans.
Is a conventional loan good for buying a condo in Tampa Bay?
It can be, but the condo association has to meet conventional guidelines. Many Florida condos don't, especially with recent reserve and inspection requirements. If that happens, I have non-warrantable condo options ready.
How much are closing costs on a conventional loan?
Closing costs typically run a few percent of the purchase price, including title, taxes, and lender fees. I provide a clear cost breakdown up front, and we can sometimes structure seller credits to reduce your out-of-pocket.
Related loan programs
From your first question to your keys, I'll walk you through low-down-payment options and Florida assistance money at your pace — in plain English.
A real, lender-reviewed pre-approval turns your offer from a hopeful guess into something sellers take seriously. I'll walk you through it start to finish.
Flexible credit, low down payments, and a forgiving path to homeownership across Tampa Bay.
Last updated June 27, 2026 · Reviewed by Ian Anderson, NMLS #1849097. This page is educational and not a commitment to lend; program details change — ask for current figures.