Conventional Mortgages in Florida: A Complete Guide for Homebuyers

Conventional mortgages are one of the most popular home loan options in Florida, offering flexibility, competitive interest rates, and long-term savings for qualified buyers.

Whether you’re purchasing your first home, upgrading to a larger property, or refinancing an existing mortgage, understanding how conventional loans work in Florida can help you make smarter financial decisions.

This guide explains what conventional mortgages are, how they work in Florida, who qualifies, and how they compare to other loan programs—so you can determine whether a conventional loan is the right fit for your goals.

What Is a Conventional Mortgage?

A conventional mortgage is a home loan that is not insured or guaranteed by the federal government. Unlike FHA, VA, or USDA loans, conventional mortgages are backed by private lenders and typically follow guidelines set by Fannie Mae and Freddie Mac.

Because these loans are not government-insured, lenders place greater emphasis on credit history, income stability, and overall financial strength. In return, borrowers who qualify often benefit from lower long-term costs, competitive interest rates, and greater flexibility.

In Florida’s diverse housing market—ranging from entry-level homes to luxury properties—conventional mortgages are widely used for both purchases and refinances.

Why Conventional Mortgages Are Popular in Florida

Conventional loans are especially popular in Florida because they adapt well to the state’s varied real estate landscape.

Buyers use them for suburban homes, coastal properties, condos, and even higher-priced residences that exceed FHA loan limits.

Some of the main reasons Florida buyers choose conventional mortgages include:

• Competitive interest rates for borrowers with strong credit
• Lower mortgage insurance costs compared to FHA loans
• Flexibility for primary residences, second homes, and investment properties
• Ability to remove private mortgage insurance (PMI) once enough equity is built

For many buyers, a conventional mortgage offers a balance of affordability and long-term savings.

Conventional Loan Eligibility Requirements in Florida

To qualify for a conventional mortgage in Florida, lenders evaluate several key factors:

• Credit Score: Most conventional loans require a minimum credit score of 620, though higher scores typically unlock better interest rates and lower PMI costs.

• Income and Employment: Lenders look for stable, verifiable income and usually prefer at least two years of consistent employment history.

• Debt-to-Income Ratio (DTI): Your total monthly debt compared to your gross income generally should fall below 45%, though some borrowers may qualify slightly higher with strong compensating factors.

• Assets and Reserves: Borrowers must show sufficient funds for the down payment, closing costs, and sometimes additional cash reserves—especially for second homes or investment properties.

Meeting these requirements helps lenders determine your ability to repay the loan responsibly.

Down Payment Options for Conventional Mortgages

One of the biggest misconceptions about conventional loans is that they require a 20% down payment. In reality, Florida buyers often qualify with much less.

Common down payment options include:

• 3% down for qualified first-time homebuyers
• 5% down for repeat buyers
• 10–20% down for stronger pricing and reduced PMI

While putting 20% down eliminates PMI entirely, many buyers choose smaller down payments to preserve cash for reserves, renovations, or other financial goals.

Understanding Private Mortgage Insurance (PMI)

If you put less than 20% down on a conventional loan, lenders require private mortgage insurance (PMI). PMI protects the lender—not the borrower—if the loan defaults.

The good news for Florida homeowners is that PMI on conventional loans is not permanent. Once your loan balance reaches 80% of the home’s value, you may request PMI removal. It must be automatically canceled when the balance reaches 78%, assuming payments are current.

This flexibility often makes conventional loans more attractive than FHA loans, which require mortgage insurance for much longer periods.

Conventional Loan Limits in Florida

Conventional loan limits in Florida are set annually and vary by county.

For most Florida counties, the standard conforming loan limit is $766,550 for a one-unit property, while higher-cost counties allow loan amounts up to $1,149,825. Loans within these limits are considered conforming conventional loans.

If a home purchase exceeds the local conforming loan limit, the loan is typically classified as a jumbo conventional loan, which comes with stricter credit, income, and reserve requirements.

Understanding your county’s loan limit is especially important in higher-priced Florida markets, where home values can rise quickly and affect financing options.

Loan limits are updated annually and may change. Actual eligibility depends on property location, loan type, and current guidelines.

Conventional Mortgages vs FHA Loans in Florida

Florida buyers often compare conventional and FHA loans when deciding how to finance a home.

Conventional loans typically offer:

• Lower long-term mortgage insurance costs
• Better pricing for strong credit borrowers
• Flexibility for second homes and investments

FHA loans may be better for:

• Lower credit scores
• Smaller savings for down payment
• Buyers needing more flexible underwriting

Choosing between the two depends on your credit profile, down payment, and long-term plans.

Using Conventional Loans for Condos and Special Properties

Florida has a large number of condominiums and coastal properties, which can present additional lending requirements.

Conventional loans often allow more flexibility than government-backed programs when financing condos—especially those that do not meet FHA approval standards.

However, lenders still review factors such as:

• HOA financial stability
• Insurance coverage
• Occupancy ratios

For many Florida condo buyers, conventional financing may be the most practical option.

Refinancing with a Conventional Mortgage in Florida

Florida homeowners frequently use conventional loans to refinance existing mortgages. Common refinance goals include:

• Lowering the interest rate
• Reducing monthly payments
• Removing PMI
• Switching from an FHA loan to a conventional loan

Refinancing into a conventional mortgage can be especially beneficial once credit improves or home equity increases.

Is a Conventional Mortgage Right for You?

A conventional mortgage may be a strong choice if you:

• Have solid credit and stable income
• Want flexibility with PMI removal
• Plan to buy a second home or investment property
• Are looking to reduce long-term borrowing costs

However, every borrower’s situation is unique, and comparing loan options is key to making the best decision.

Frequently Asked Questions

These FAQs are designed to help buyers and homeowners quickly understand key details before choosing a conventional loan.

What credit score is needed for a conventional mortgage in Florida?

Most lenders require a minimum credit score of 620 for a conventional mortgage in Florida. Higher credit scores typically qualify for better interest rates and lower private mortgage insurance costs.

Can first-time homebuyers use a conventional loan in Florida?

Yes. Many first-time homebuyers in Florida qualify for conventional loans with down payments as low as 3%, provided they meet credit, income, and eligibility requirements.

Is private mortgage insurance required on conventional loans?

Private mortgage insurance (PMI) is required on conventional loans when the down payment is less than 20%. PMI can be removed once sufficient home equity is reached.

Can conventional mortgages be used for investment properties in Florida?

Yes. Conventional mortgages may be used for primary residences, second homes, and investment properties in Florida, though requirements and down payments vary by occupancy type.

Are conventional loans better than FHA loans in Florida?

Neither loan is universally better. Conventional loans often offer lower long-term costs for borrowers with strong credit, while FHA loans may be more accessible for buyers with lower credit scores or smaller down payments.

Final Thoughts

Conventional mortgages play a major role in Florida’s housing market, offering flexibility and long-term savings for qualified buyers and homeowners.

By understanding eligibility requirements, down payment options, and how PMI works, you can decide whether a conventional loan aligns with your financial goals.

Exploring your options early—and comparing them carefully—can make the home buying or refinancing process smoother and more predictable.