Conventional Loan Requirements in Arizona
Conventional loans in Arizona ask for 3% down if you're a first-time buyer (5% if not), steady income, debts that fit, and a loan within the 2026 limit of $832,750. Forward Loans (NMLS #2006640) compares conventional options from the lenders we work with.
We're a mortgage broker in Phoenix. A conventional loan isn't insured by the government. Most follow Fannie Mae or Freddie Mac rules. Fannie Mae no longer sets a fixed minimum credit score for loans run through its automated underwriting system, so we check your file against each lender's own minimums, subject to full underwriting. This page is part of our Arizona first-time homebuyer guide.
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On this page
- What are the conventional loan requirements in Arizona?
- What credit score do you need for a conventional loan?
- How much do you need to put down on a conventional loan?
- What is the conforming loan limit in Maricopa County for 2026?
- When do you pay PMI, and how does it come off?
- What should you expect with a conventional loan?
- Conventional or FHA: which one costs less for you?
- Can you use Arizona down payment assistance with a conventional loan?
- How does conventional compare with VA and USDA?
- How do you start a conventional loan with Forward Loans?
- Conventional loan FAQs
What are the conventional loan requirements in Arizona?
A conventional loan is a mortgage with no government insurance behind it. Most are “conforming,” which means they meet Fannie Mae or Freddie Mac rules and fall under the yearly loan limit. Arizona follows the national rules. The table below uses Fannie Mae’s figures. Freddie Mac’s can differ, so we check whichever one your file runs through.
Conventional loans in Arizona at a glance
| Item | 2026 figure | Source |
|---|---|---|
| Minimum down, first-time buyer, one unit | 3% | Fannie Mae 97% LTV options; Eligibility Matrix |
| Minimum down, other buyers, one-unit primary home | 5% (3% with HomeReady if income is at or under 80% of the area median) | Fannie Mae Eligibility Matrix |
| Minimum down, 2 to 4 units, primary home | 5% | Fannie Mae Eligibility Matrix |
| Minimum down, second home | 10% | Fannie Mae Eligibility Matrix |
| Credit floor | No fixed Fannie Mae minimum on Desktop Underwriter loans (casefiles created on or after Nov. 16, 2025). Lenders set their own | Fannie Mae Selling Guide B3-5.1-01 |
| Debt-to-income limit | Up to 50% through Desktop Underwriter; 36% to 45% when underwritten by hand | Fannie Mae Selling Guide B3-6-02 |
| One-unit loan limit, Maricopa, Pinal, and Pima | $832,750 | FHFA, Nov. 25, 2025 |
| Private mortgage insurance (PMI) | Required under 20% down. You can ask to remove it at 80% of the original value. It ends on its own at 78% | CFPB |
| Seller concessions, primary or second home | 3% with under 10% down, 6% with 10% to under 25% down, 9% with 25% or more down | Fannie Mae Selling Guide B3-4.1-02 |
Sources checked October 6, 2026.
Here’s what a conventional loan asks for:
- A down payment. 3% for a first-time buyer on a one-unit home. 5% for most other buyers.
- A credit score that meets the lender’s minimum. Your score also drives the price and the PMI.
- Steady, documented income.
- Debts that fit. Up to 50% debt-to-income (DTI) through Fannie Mae’s automated system when the rest of the file is strong.
- A loan within the conforming limit. $832,750 for one unit in 2026. Above that, it’s a jumbo loan.
- A home that appraises at a value that supports the loan.
- Cash for closing costs. In Arizona, plan on about 2.5% of the purchase price as a working estimate. See our closing costs guide for Arizona.
What credit score do you need for a conventional loan?
There’s no single number anymore. Fannie Mae removed its minimum credit score for loans run through Desktop Underwriter (DU), its automated underwriting system, for casefiles created on or after November 16, 2025. Loans underwritten by hand still carry a minimum. Freddie Mac’s automated system, Loan Product Advisor, now accepts VantageScore 4.0 scores as well as Classic FICO.
Lenders set their own floors on top of that. A higher score usually means lower PMI and better pricing. Arizona assistance programs set floors too, so a score can work for the loan and still miss the assistance. More in our guide to the minimum credit score for each Arizona loan type. Source: Fannie Mae Selling Guide B3-5.1-01 and announcement SEL-2025-09, and Freddie Mac’s Loan Product Advisor release notes (October 2026), checked October 6, 2026.
How much do you need to put down on a conventional loan?
3% on a one-unit home if at least one borrower is a first-time buyer. 5% for most other primary-home buyers, including 2 to 4 unit homes you live in. 10% on a second home. Those are Fannie Mae program minimums. The 3% first-time option is fixed rate only. HomeReady also allows 3%, with no first-time buyer rule, if household income is at or under 80% of the area median.
The down payment can come from savings, a gift, or an Arizona down payment assistance program. Our page on the minimum down payment for each loan type lays conventional next to FHA, VA, and USDA. Source: Fannie Mae Eligibility Matrix (August 5, 2026) and 97% LTV options FAQ, checked October 6, 2026.
What is the conforming loan limit in Maricopa County for 2026?
$832,750 for a one-unit home. Pinal and Pima counties sit at the same figure. The limits for 2 to 4 units are higher: $1,066,250 for two units, $1,288,800 for three, and $1,601,750 for four.
The Federal Housing Finance Agency (FHFA) sets the limit each year. It caps the loan, not the price of the house. Source: FHFA conforming loan limit release, November 25, 2025, and FHFA county list, checked October 6, 2026. Confirm the current figure with your loan officer before you rely on it.
When do you pay PMI, and how does it come off?
You pay private mortgage insurance (PMI) when you put less than 20% down. It protects the lender if the loan defaults. It’s usually part of the monthly payment. Some buyers pay it upfront at closing instead, or take a slightly higher rate so the lender pays it.
Does PMI ever go away?
Yes. That’s the biggest difference from FHA. Under federal law:
- You can ask to remove it once your balance is scheduled to reach 80% of the home’s original value, or sooner with extra payments. The request goes in writing, you need a good payment history, and the lender can ask you to show the value hasn’t dropped.
- It ends on its own when the balance is scheduled to reach 78% of the original value, if you’re current.
- It ends for good at the midpoint of the loan’s term, if you’re current.
Source: Consumer Financial Protection Bureau (CFPB), checked October 6, 2026. Your Loan Estimate shows the exact PMI cost for your file.
What should you expect with a conventional loan?
PMI is priced on your score
Two buyers with the same down payment can pay different PMI. Your own Loan Estimate shows yours.
The appraisal checks value and condition
Fannie Mae doesn't require a routine pest inspection. If the appraiser sees signs of termites or other damage, the lender needs proof it was fixed or a professional report on it. You can still order your own inspection.
The limit sets the loan type
Up to $832,750 for one unit in 2026, it's conforming. Above that, it's jumbo. Conventional also covers second homes, which FHA generally doesn't.
Conventional or FHA: which one costs less for you?
It depends on your score and your down payment. Conventional PMI is priced more on your credit score, and it can come off. FHA's floors are lower, its premium doesn't change with your score, and it often lasts the life of the loan.
| Conventional | FHA | |
|---|---|---|
| Often fits | Solid credit, 3% to 5% or more down | Scores in the 580 to 660 range, thin savings |
| Minimum down | 3% first-time buyer, 5% most others | 3.5% at 580 or higher, 10% at 500 to 579 |
| Credit floor | No fixed Fannie Mae floor on DU loans; lenders set their own | 580 for 3.5% down; 500 to 579 for 10% down |
| Mortgage insurance | PMI under 20% down. Ends at 78% of original value | Upfront 1.75%, plus an annual premium. 11 years with 10% or more down, otherwise the life of the loan |
| 2026 one-unit limit, Maricopa | $832,750 | $557,750 |
Sources: Fannie Mae, CFPB, HUD Mortgagee Letters 2010-29 and 2023-05, FHFA, HUD FHA Mortgage Limits. Checked October 6, 2026.
The fair way to compare is two Loan Estimates for the same home, side by side. Our page on FHA loan requirements in Arizona covers the other half.
Can you refinance from FHA to conventional to drop mortgage insurance?
Often, yes, once you have enough equity and your credit fits. The conventional loan pays off the FHA loan. If the new loan is at 80% or less of the home’s value, it carries no PMI. A refinance has its own costs, so we price it against keeping the FHA loan. More on our refinance page.
A recent conventional file from our team
In October 2026 we closed a conventional purchase in metro Phoenix. The home was about $385,000. The credit score on the file was in the high 700s. There were three borrowers on the loan. One lives in the home. The other two are non-occupant co-borrowers, which conventional allows on a primary home, and their income counted too. With all three incomes, the debt-to-income ratio landed in the low 40s. The buyers brought about $40,000 to closing.
Early on, our loan officer priced FHA and conventional side by side for this file. The monthly cost came out close. The bigger difference was how long the mortgage insurance lasts. The buyers put less than 20% down, so the loan carries PMI. It ends on its own once the balance is scheduled to reach 78% of the original value. On FHA with the same down payment, the annual premium would run 11 years.
Real closed loan, October 2026. Conventional fixed-rate purchase. Purchase price about $385,000. Figures are rounded. This is an example, not an offer or a commitment to lend. All loans subject to full underwriting.
Michael Creel, NMLS #420674 | Forward Loans, NMLS #2006640 | Equal Housing Lender | nmlsconsumeraccess.org
Can you use Arizona down payment assistance with a conventional loan?
Yes. Arizona’s two main programs work with the conventional loans made for housing finance agencies (Fannie Mae HFA Preferred and Freddie Mac HFA Advantage). The assistance rides on top of the first mortgage as a second lien.
- Home Plus is statewide. Up to 4% assistance, a 620 minimum credit score, a household income limit, and a homebuyer education course.
- Home in 5 Advantage covers Maricopa County, including the City of Phoenix. Up to 6% assistance, a 640 minimum credit score, a household income limit, and a DTI under 50%. Purchase only.
The programs set the rules. We help you access them. Income limits and terms change, so confirm current figures on each program’s materials. More in our guides to Arizona down payment assistance programs and how much income you need and how lenders count it.
How does conventional compare with VA and USDA?
VA loans are for eligible veterans, service members, and some surviving spouses. No down payment and no monthly mortgage insurance, but a funding fee, and only for a home you live in. USDA loans work only in eligible rural areas, have income limits, and charge a guarantee fee instead of PMI. Conventional has no service or location rule.
How do you start a conventional loan with Forward Loans?
- Start a pre-qualification estimate online, or call 602-730-2270.
- A Forward Loans loan officer reviews your credit, income, and debts, and checks your file against each lender’s minimums.
- We compare conventional options from the lenders we work with through our Mortgage Marketplace, plus any assistance you’re eligible for, so you don’t apply lender by lender.
- You get a Loan Estimate in writing. If FHA fits too, we price both.
- Your file goes through full underwriting.
What do you bring to the first call?
Your recent pay stubs, W-2s or tax returns, bank statements, a photo ID, and a list of your monthly debts. If you’re self-employed, bring your business tax returns too. If you own a home now, bring your current mortgage statement.
Create your custom loan scenario today and see the possibilities for yourself!
Get startedConventional loan FAQs
What credit score do I need for a conventional loan in Arizona?
Fannie Mae has no fixed minimum for loans run through Desktop Underwriter, for casefiles created on or after November 16, 2025. Lenders still set their own minimums, so Forward Loans checks your score against each lender we work with.
How much do I need to put down on a conventional loan?
3% on a one-unit home if at least one borrower is a first-time buyer, or with HomeReady if your income fits its limit. 5% for most other buyers, and 10% on a second home.
What is the conforming loan limit in Maricopa County for 2026?
$832,750 for a one-unit home, the same as Pinal and Pima counties. Limits for 2 to 4 units are higher. Source: FHFA, checked October 6, 2026.
When does PMI come off a conventional loan?
You can ask to remove it once your balance is scheduled to reach 80% of the home’s original value. It ends on its own at 78% if you’re current on payments, and for good at the loan’s midpoint.
Can I use Home Plus with a conventional loan?
Yes. Home Plus works with conventional HFA loans. It offers up to 4% assistance with a 620 minimum credit score, an income limit, and a homebuyer education course. Confirm current terms on the program’s materials.
Is a conventional loan cheaper than FHA?
It depends on your score and down payment. Conventional PMI is priced on your score and can come off. FHA’s premium often lasts the life of the loan. Compare two Loan Estimates for the same home.
Can I refinance from FHA to conventional to drop mortgage insurance?
Often, yes, once you have enough equity and your credit fits. At 80% or less of the home’s value, the conventional loan carries no PMI. A refinance has its own costs, so we price it against keeping the FHA loan.
How do I start a conventional loan with Forward Loans?
Start a pre-qualification estimate online or call 602-730-2270. A Forward Loans loan officer reviews your file, compares conventional options, and sends you a Loan Estimate in writing.
About the author
Michael Creel, Founder, Forward Loans. NMLS #420674.
Michael Creel founded Forward Loans in 2020 after 20-plus years in mortgage, marketing, and real estate. He is based in Phoenix and personally licensed to originate loans in Arizona, California, Colorado, and Texas (NMLS #420674).
His focus is building a brokerage that feels different from a traditional lender. Forward Loans is set up so clients get real options from multiple investors, straight answers from people who know their file, and clear communication through closing. The company serves homebuyers and homeowners across eight states.
Michael leads day-to-day operations and the marketing side of the business. He spends most of his time on strategy, team development, and how Forward shows up publicly through its content, brand, and Realtor partnerships.
About this guide
Last updated October 2026. Program terms, credit requirements, and assistance program limits change, and the figures referenced here should be confirmed with your loan officer or the program's current materials before you rely on them. This page is education, not a commitment to lend. All loans are subject to full underwriting and property eligibility.
Forward Loans is licensed as both a mortgage broker and a non-delegated correspondent mortgage lender. Depending on the loan program, we either arrange financing through wholesale lenders, or originate and fund the loan ourselves and sell it to an investor that provides the underwriting decision.
Forward Loans, NMLS #2006640 | Michael Creel, NMLS #420674 | Equal Housing Lender | nmlsconsumeraccess.org
11201 N Tatum Blvd, Ste 300, Phoenix, AZ 85028
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