Conventional loans are the most common type of mortgage in the United States — and for good reason. They offer competitive rates, flexible down payment options, and the ability to cancel mortgage insurance once you build equity. If you have decent credit and some savings for a down payment, a conventional loan is likely the most cost-effective way to buy a home in Miami.
This guide covers everything Miami buyers need to know about conventional loans in 2026 — from minimum requirements to loan limits, PMI rules, and how to decide between conventional and government-backed options like FHA or VA loans.
What Is a Conventional Loan?
A conventional loan is any mortgage that is not insured or guaranteed by a government agency. Instead, conventional loans follow guidelines set by Fannie Mae and Freddie Mac — the two government-sponsored enterprises that buy and securitize most mortgages in the U.S.
There are two types:
- Conforming loans — fall within the loan limits set by the Federal Housing Finance Agency (FHFA). These are what most people mean when they say "conventional loan."
- Non-conforming loans — exceed the conforming limit and are called jumbo loans. These have stricter qualification requirements.
Conventional Loan Requirements in Florida
📊 Credit Score
620 minimum. Best rates at 740+. Higher scores unlock lower PMI rates and better pricing adjustments.
🏦 Down Payment
3% minimum (first-time buyers). 5% standard. 20% eliminates PMI entirely.
💰 Loan Limits
$806,500 for single-family in Miami-Dade (2026). This is a high-cost area limit.
📉 DTI Ratio
Up to 45% back-end, with some lenders allowing 50% with strong compensating factors like high reserves.
Income & Employment
Conventional loans require standard income documentation: two years of W-2s or tax returns, recent pay stubs, and verification of employment. Self-employed borrowers need two years of personal and business tax returns — or you can explore our bank statement loan program as a Non-QM alternative.
Reserves
For primary residences, most conventional loans don't require reserves (money left over after closing). However, for second homes you'll typically need 2–6 months of reserves, and investment properties require 6+ months. In Miami's competitive market, showing strong reserves can also help offset a higher DTI or lower credit score.
Conventional Loan Limits in Miami-Dade County (2026)
| Property Type | Conforming Limit |
|---|---|
| Single-Family (1 unit) | $806,500 |
| Duplex (2 units) | $1,032,650 |
| Triplex (3 units) | $1,248,150 |
| Fourplex (4 units) | $1,551,250 |
Miami-Dade is designated a high-cost area by FHFA, so the conforming limit is higher than the national baseline of $766,550. Broward County has the same limits. If your purchase price pushes you above these numbers, you'll need a jumbo loan — which we also offer through our wholesale lending partners.
Understanding PMI on Conventional Loans
Private mortgage insurance (PMI) is required on any conventional loan with less than 20% down. It protects the lender — not you — in case of default. But here's the good news: unlike FHA mortgage insurance, conventional PMI is cancellable.
- Borrower-requested cancellation: Once you reach 20% equity (based on your original purchase price), you can request your servicer remove PMI.
- Automatic cancellation: Your servicer must cancel PMI when you hit 22% equity based on the original amortization schedule.
- Appraisal-based cancellation: If your home has appreciated significantly, you can order a new appraisal and request removal at 20% equity based on current value (typically requires 2+ years of ownership).
PMI costs typically range from 0.3% to 1.5% of the loan amount annually, depending on your credit score and down payment. On a $500,000 loan, that's $125–$625 per month. Higher credit scores get dramatically lower PMI rates — another reason to get your score as high as possible before applying.
Conventional vs. FHA: Which Is Right for You?
| Feature | Conventional | FHA |
|---|---|---|
| Min. Down Payment | 3–5% | 3.5% |
| Min. Credit Score | 620 | 580 |
| Mortgage Insurance | Cancellable at 20% equity | Lifetime (if <10% down) |
| Upfront Insurance Fee | None | 1.75% |
| Loan Limit (Miami) | $806,500 | $621,000 |
| Max DTI | 45–50% | Up to 57% |
| Condo Restrictions | More flexible | HUD approval required |
| Investment Property | Yes (15–25% down) | No |
Bottom line: If your credit score is 680 or higher and you can put at least 5% down, conventional will almost always cost less over the life of the loan — primarily because you can cancel PMI. If your credit is below 680 or you need maximum DTI flexibility, FHA might get you approved where conventional won't.
Not sure which fits your situation? Read our full FHA vs. Conventional comparison — or better yet, apply and we'll run both scenarios and show you the numbers.
Conventional Loans for Investment Properties
Unlike FHA and VA, conventional loans can be used for investment properties — making them a key tool for Miami real estate investors. Here are the basics:
- Down payment: 15% for single-family, 25% for 2–4 units
- Rates: Typically 0.5–0.75% higher than primary residence rates
- Reserves: 6+ months required
- Limit: Up to 10 financed properties per borrower (Fannie Mae guideline)
If you're an investor who would rather qualify based on the property's rental income instead of your personal income, check out our DSCR loan program. It's designed specifically for rental property investors and doesn't require W-2s or tax returns.
Low Down Payment Options: HomeReady & Home Possible
Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow qualified buyers to put just 3% down on a conventional loan. These programs are designed for:
- First-time home buyers (no ownership in the past 3 years)
- Borrowers earning at or below 80% of area median income
- Properties in designated low-income census tracts
In Miami, where median home prices push many buyers to their limits, these 3% down programs are a genuine alternative to FHA — especially for buyers with 680+ credit who want to avoid lifetime mortgage insurance.
Why Choose Lifetime Capital Funding for Your Conventional Loan
As a licensed Florida mortgage lender (NMLS #2583712), we partner with over 50 wholesale lenders to shop your conventional loan across multiple sources. That means you get competitive rates without being locked into a single bank's pricing.
- Rate shopping done for you — we compare pricing from 50+ lenders and present the best options
- Local expertise — we understand Miami-Dade and Broward County markets, condo rules, and what it takes to close here
- Bilingual service — fluent English and Spanish from application through closing
- Backup plans — if conventional doesn't work, we have Non-QM alternatives ready to go
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Frequently Asked Questions
Lifetime Capital Funding LLC. NMLS #2583712. Equal Housing Lender. All loan programs are subject to credit approval, income verification, and property qualification. Rates and terms vary and are not guaranteed. Not a commitment to lend. Conforming loan limits are subject to annual adjustment by FHFA.