The Conventional Loan:
The Standard Mortgage, in Plain English
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. It is the financing most buyers mean when they say "a regular home loan," and for most of the Las Vegas Valley it is the loan every other option gets measured against. This guide explains how conventional financing works in general terms: what makes a loan conventional, how conforming and non-conforming loans differ, how down payments and credit fit in, what PMI is really for, and how conventional loans compare with the government-backed programs. The exact requirements and costs for your situation always come from a lender who walks you through your own numbers.
What is a conventional loan? A mortgage with no government guarantee
The short definition: a conventional loan is a mortgage that is not insured or guaranteed by a government agency. FHA loans are insured by the federal government, VA loans are guaranteed by the Department of Veterans Affairs, and USDA loans are backed by the Department of Agriculture. A conventional loan has none of those backstops. You borrow from a private lender, a bank, a credit union or a mortgage company, and that lender either carries the risk itself or sells the loan to investors who do.
Because there is no government guarantee behind it, the lender has to be comfortable that the loan will be repaid. That is why underwriting on a conventional loan tends to look closely at your credit history, your income, your debts and the property itself. None of that is a judgment on you. It is the private market being careful with its own money, the same reason any loan gets looked at before it is made.
Here is where my appraisal background keeps me honest with buyers. The lender underwrites you, but the value of the home also has to support the loan. A conventional appraisal is ordered by the lender to confirm the property is worth what you are paying and that the loan amount makes sense against the market. I have spent decades on both sides of that equation, and it is exactly the part of a purchase too many buyers leave until the last minute.
Conforming vs. non-conforming: two tracks under the same roof
Within conventional financing there are two broad categories, and the difference matters more than most buyers expect. A conforming loan fits within the loan limits and guidelines that Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy most conventional mortgages, are set up to purchase. Conforming loans are what most conventional borrowers get. They are the standard product most lenders quote first.
A non-conforming loan sits outside that framework, usually because the loan amount is larger than the current conforming limit or because the loan has features that do not fit the standard guideline. The best-known example is the jumbo loan, the bigger mortgage used for higher-priced homes. Non-conforming loans are priced and underwritten differently, and they typically get a stricter look at both the borrower and the property.
The conforming limit is not a fixed number. It is set and adjusted over time, and it can vary by county, so the limit that applies to a loan in Las Vegas, Henderson or Summerlin right now is a current number a lender can confirm in minutes. Anyone who prints a limit into a blog post, including this one, is giving you history, not your answer.
Down payment and credit: general rules, specific answers
The general rules of conventional financing are worth knowing before you talk to anyone. Conventional loans tend to favor a stronger credit profile and a larger down payment than the government-backed programs do, and because no agency stands behind the lender, the lender leans harder on your history and your income. That is the honest general description, and it is about as far as general information gets.
Exact down payment minimums and credit-score thresholds change over time, they vary from lender to lender, and the number that applies to you depends on the loan amount, the property type and the rest of your financial picture. I am not going to print figures here, and you should be skeptical of anyone who quotes round numbers as if they are permanent. The right way to learn your number is to have a lender run your actual situation through a pre-approval.
Pre-approval also forces the honest conversation early: what you can qualify for and what you should comfortably pay are often two different numbers. I walk buyers through both, because a payment that leaves you stretched is not a smarter decision just because a lender approved it.
PMI: what private mortgage insurance is really for
PMI stands for private mortgage insurance, and it connects directly to the size of your down payment. The smaller the down payment, the less of the home you own at closing and the more the lender has at risk if a borrower stops making payments and the home eventually has to be sold. PMI is the lender's protection against that risk. The borrower pays for it, but it protects the lender. Understanding that one sentence up front makes everything else about it make sense.
In general terms, conventional loans with a down payment below the conventional threshold are what carry PMI. It is usually built into your monthly payment, and it does not have to stay forever: as you build equity through payments, and here in Las Vegas often through appreciation, PMI can be removed once your equity reaches the point the lender's rules call for. Refinancing is another common path when rates and values line up. The specific rules depend on the lender and the terms you close with, so they belong in writing on your loan documents, not in a general guide.
My advice as someone who spent years valuing homes: do not treat PMI as a penalty. It is the price of a smaller down payment, and for many buyers that trade is worth it. But know what you are paying for. In Las Vegas, a meaningful part of your equity growth can come from appreciation, so the value side of the equation, not just the mortgage side, helps decide how quickly you get past PMI. That is why I help buyers think about a property's value and resale, not only the loan sitting on top of it.
Conventional vs. FHA, VA and USDA: the honest trade-offs
The FHA loan is insured by the federal government, and it was designed to open the door for borrowers who do not fit the conventional mold: historically, lower down payments and more flexible credit guidelines. That flexibility comes with costs of its own, including FHA's mortgage insurance, which follows its own rules and its own timeline. FHA is a real option for many Las Vegas buyers. It is not automatically better or worse than conventional. It is different, and different fits different people.
The VA loan is available to eligible veterans, service members and, in some cases, surviving spouses, and it is one of the strongest benefits in home financing, with no-down-payment terms for eligible borrowers and no continuing mortgage insurance. If you are eligible, it often deserves to sit near the top of your list. I have a full guide to it on this site.
The USDA loan is designed for qualifying rural and suburban areas, and it can offer low-down-payment terms for homes that fit the program's location and income rules. Much of the Las Vegas Valley does not fit the USDA map, which is why it comes up less often here, but it is worth a real look for the areas and buyers it fits.
The honest version of "which loan should I use" is: it depends on your credit, your savings, your property and your plans. That is not a dodge, it is the truth about a decision with real money attached. A good lender can lay the conventional, FHA, VA and USDA numbers out side by side for the same purchase, and then the comparison becomes actual math instead of marketing.
Who does what
I am a real estate professional, not a lender. I can help you understand how a loan fits your search and point you to lenders I trust for Nevada purchases. But exact down payment requirements, credit standards, PMI rules, conforming limits and rates are set by lenders, investors and the programs themselves, and they belong in writing on your loan documents. Have a lender walk you through the requirements and costs for your specific situation before you plan around any figure.
Next resources
Pre-approval, the common loan programs, and what drives your rate, step by step.
Read it How to Qualify for a MortgageWhat lenders actually look at when you apply, in plain terms.
Read it Down Payment AssistanceVA and USDA zero-down options, the FHA path, and state and local programs.
Read itLet's look at your mortgage options together
I have spent more than 36 years helping Las Vegas buyers and sellers, and before that I spent years appraising homes for a living. When we talk about a loan like this one, I can help you understand the whole picture: whether the program fits your credit and your savings, whether it makes sense for the home and the community you have in mind, and what the numbers actually look like month to month. And because I work with lenders I trust for Nevada purchases, I can point you to the right person to run your exact numbers.
My job is to help you understand your options, not to push you into a loan. If a different program fits you better, I will tell you. If waiting makes more sense, I will tell you that too. Call or email, and we will go through how a conventional loan would actually work for you, no pressure and no guesses.
Licensed in Nevada · Sales Person S.0072707 · Equal Housing Opportunity
Disclaimer: By providing your information, you agree to receive communications from Sandy Margolin. Message and data rates may apply. If the property is listed with another REALTOR® or Broker, please disregard. Information deemed reliable but not guaranteed.