Conventional Loans in South Carolina
Flexible mortgage financing for qualified buyers throughout the Palmetto State
Start My Pre-Approval → TodayWhat Is a Conventional Loan?
A conventional loan is a mortgage that isn’t backed by a government agency like the FHA, VA, or USDA. Instead, conventional loans follow guidelines set by Fannie Mae and Freddie Mac. They’re the most widely used loan type in South Carolina — and for good reason: they offer competitive rates, flexible terms, and fewer restrictions than government-backed loans.
If you have good credit and some savings for a down payment, a conventional loan may offer the best overall value for your home purchase or refinance.
🏠 No PMI With 20% Down
Put down 20% or more and avoid private mortgage insurance entirely — saving you hundreds per month.
📊 Higher Loan Limits
Conventional loans follow conforming loan limits ($832,750 in 2026) and jumbo options are available beyond that.
🔓 PMI Removal Option
Unlike FHA loans, PMI on conventional loans automatically cancels once you reach 20% equity in your home.
💰 Lower Down Payment Options
Qualified first-time buyers can put down as little as 3% through Fannie Mae’s HomeReady or Freddie Mac’s Home Possible programs.
Conventional Loan Requirements
Conventional loans have stricter requirements than government-backed loans, but they offer more flexibility in other areas:
Credit Score
A minimum credit score of 620 is required for most conventional loans. Higher scores (720+) typically unlock the best interest rates.
Down Payment
As low as 3% for eligible first-time buyers, or 5% for repeat buyers. Putting down 20% eliminates the PMI requirement.
Debt-to-Income Ratio (DTI)
Maximum DTI is typically 45%, though some borrowers can go up to 50% with strong compensating factors like high credit scores or substantial reserves.
Loan Limits
For 2026, the conforming loan limit in most South Carolina counties is $832,750 for a single-family home. Loans above this amount are considered jumbo loans and have different requirements.
Down Payment Options
| Down Payment | PMI Required? | Best For |
|---|---|---|
| 3% | Yes | First-time buyers (HomeReady/Home Possible) |
| 5% | Yes | Repeat buyers with limited savings |
| 10% | Yes (lower rate) | Buyers wanting to reduce monthly PMI cost |
| 20%+ | No | Buyers who want to avoid PMI entirely |
Conventional Loan Programs
Fannie Mae HomeReady
Designed for low-to-moderate income borrowers with as little as 3% down. Allows income from household members who aren’t on the loan, and includes reduced PMI rates.
Freddie Mac Home Possible
Similar to HomeReady, with 3% down options and competitive PMI rates for income-eligible borrowers.
Standard Conventional (Fannie/Freddie)
The most common option with flexible down payment amounts, competitive rates, and options for primary residences, second homes, and investment properties.
Jumbo Loans
For loan amounts above $832,750 in 2026. Typically require higher credit scores (700+), larger down payments (10-20%), and more extensive financial documentation.
Conventional vs. FHA vs. VA vs. USDA
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Min. Down Payment | 3% | 3.5% | 0% | 0% |
| Credit Score | 620+ | 580+ | Flexible | 640+ (typical) |
| Mortgage Insurance | PMI (removable) | MIP (life of loan) | None | Annual fee |
| Loan Limits | $832,750 | $498,257 | No limit | Varies |
| Property Types | All types | Primary only | Primary only | Rural/suburban |
How to Qualify for a Conventional Loan
Follow these steps to position yourself for conventional loan approval:
- Check and improve your credit score — aim for 700+ for the best rates
- Reduce your debt — pay down credit cards and installment loans to lower your DTI
- Save for a down payment and reserves — most lenders want 2+ months of mortgage payments in savings after closing
- Document your income — gather W-2s, tax returns, pay stubs, and bank statements
- Get pre-approved — know your budget before you start home shopping
Ready to Start Your Conventional Loan?
Get pre-approved today and shop for your South Carolina home with confidence. Our team makes the process simple and fast.
Start My Pre-Approval →Conventional Loans for Investment Properties
Unlike government-backed loans, conventional financing can be used for investment properties and second homes, making them popular with real estate investors throughout Charleston, Summerville, and the surrounding Lowcountry.
- Investment properties: Typically require 15-25% down and have higher interest rates
- Second homes: Usually require 10% down with no PMI option at 20%+
- Multi-family (2-4 units): Available with as little as 15% down
Frequently Asked Questions
How long does conventional loan approval take?
A conventional loan typically closes in 30-45 days, though pre-approved buyers with complete documentation can sometimes close faster.
Can I use gift funds for my down payment?
Yes. Conventional loans allow gift funds from family members for the down payment, though documentation is required.
Is there an income limit for conventional loans?
Standard conventional loans have no income limits. However, Fannie Mae HomeReady and Freddie Mac Home Possible programs do have income limits based on area median income.
When does PMI come off my conventional loan?
PMI automatically cancels when your loan-to-value ratio reaches 78%. You can also request removal at 80% LTV if your payments are current.
Questions About Conventional Loans?
Our mortgage team is ready to help you navigate your options and find the best conventional loan for your situation.
Talk to a Loan Officer