Who qualifies: U.S. citizens, permanent residents, and many visa holders; legal adults, optionally with a co-borrower. What qualifies: a primary home, second home, or investment property (a big conventional advantage) — 1–4 units, warrantable condos, PUDs, and more, up to 10 financed properties. First-time programs (HomeReady/Home Possible) add a ≤80% area-median-income limit and a short education course. After a credit event, waiting periods apply (4 yrs Ch.7 bankruptcy, 7 yrs foreclosure). Not eligible? There's almost always another path. For the numeric thresholds, see Requirements; for the full overview, the Conventional Loans pillar.
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Borrower eligibility — who can apply
Conventional loans are open to a broad range of borrowers:
- U.S. citizens — fully eligible.
- Permanent residents (green card holders) — fully eligible.
- Non-permanent residents — many visa holders with valid work authorization (an EAD or qualifying visa) are eligible; documentation of status is required.
- Co-borrowers — you can apply jointly, and conventional even allows a non-occupant co-borrower (a parent, for example) who lives elsewhere to help you qualify.
You must be a legal adult with the capacity to enter a contract. Foreign nationals without U.S. residency status generally aren't eligible for standard conventional financing — but that's not a dead end; a foreign national loan is built exactly for that situation.
Occupancy: conventional's biggest eligibility advantage
This is where conventional pulls clearly ahead of government loans. FHA, VA, and USDA loans are for primary residences (VA at time of purchase). A conventional loan has no occupancy restriction — you can finance:
| Occupancy | Eligible? | Typical minimum down |
|---|---|---|
| Primary residence | Yes | 3–5% |
| Second home | Yes | 10%+ |
| Investment property | Yes | 15–25% |
You can also finance up to 10 properties with conventional loans — the reason it's the backbone of many California real estate investors' portfolios. (Note: the 3%-down first-time programs below are primary-residence only.)
Eligible property types
Conventional financing covers most standard homes:
- 1–4 unit homes (single-family through fourplex)
- Warrantable condominiums — the project must meet rules like completed common areas and sufficient owner-occupancy (often ≥51% owner-occupied or second homes)
- Planned Unit Developments (PUDs) and co-ops
- Manufactured homes on a permanent foundation
Every purchase needs a clear title and usually an appraisal — though conventional loans uniquely allow an appraisal waiver ("value acceptance") in some cases, which can save time and money. Properties that don't fit — a non-warrantable condo, a unique or mixed-use building — may need a portfolio or non-QM loan instead.
First-time-friendly programs: HomeReady & Home Possible
Fannie Mae's HomeReady and Freddie Mac's Home Possible are the 3%-down conventional programs designed for buyers with solid credit but limited savings. Their extra eligibility rules:
| Rule | Detail |
|---|---|
| Income limit | At or below 80% of area median income (AMI) for the property's location |
| Occupancy | Primary residence only (no investment/vacation) |
| Education | If all occupying borrowers are first-timers, one must complete a homeownership course |
| Flexible income | Boarder or accessory-unit rent, and on-time rent history, can help you qualify |
| Funds | Gifts and grants allowed; flexible co-borrowers |
The payoff: 3% down, competitive rates (often the same or better than standard conventional), and cancelable PMI. The 2026 area median incomes took effect in mid-2026, so your eligibility depends on current figures for your county — we'll check your exact area. Earn above 80% AMI? You're not shut out; you'd simply use standard conventional at 5% down.
Waiting periods after a credit event
A past bankruptcy or foreclosure doesn't end your homeownership story — but conventional loans require time to pass and credit to be re-established. Standard waiting periods (measured from the discharge, sale, or completion date):
| Event | Conventional wait | (FHA, for comparison) |
|---|---|---|
| Chapter 7 bankruptcy | 4 years | ~2 years |
| Chapter 13 bankruptcy | 2 years from discharge | ~1–2 years |
| Short sale / deed-in-lieu | 4 years | ~3 years |
| Foreclosure | 7 years | ~3 years |
Two things worth knowing: documented extenuating circumstances (a one-time event outside your control) can sometimes shorten these, and if a foreclosure was included in a bankruptcy, the clock may run from the bankruptcy discharge instead — often meaningfully shorter. Because conventional waits are longer than FHA, if you're rebuilding after a recent credit event, FHA is frequently the faster route back to owning.
Are you eligible? A quick self-check
✓ Likely eligible if you…
- Are a citizen, resident, or valid visa holder
- Have credit and DTI in range (see Requirements)
- Are buying an eligible property type
- Are past any credit-event waiting period
- Have a loan amount within the conforming limit
✕ May need another program if you…
- Are a foreign national (no U.S. status)
- Had a recent bankruptcy/foreclosure
- Have credit below ~620
- Need a loan above the conforming limit
- Are buying a non-warrantable or unusual property
If you're not eligible for conventional — your alternatives
Falling outside conventional's box is common, and it almost never means "no." As a broker, we match your situation to the right program:
- Lower credit or a recent credit event → FHA (down to 580, shorter waits) or non-QM.
- Loan above the conforming limit → jumbo.
- Foreign national buyer → foreign national loan.
- Self-employed with write-offs → bank statement or 1099 loans.
- Veteran → a VA loan (zero down, no PMI) usually beats conventional.
Conventional eligibility FAQs
Who can get a conventional loan?
Citizens, permanent residents, and many visa holders with valid work authorization, as legal adults. You can add a co-borrower, including a non-occupant one. Foreign nationals typically use a separate program.
Can I buy a rental with conventional?
Yes — primary, second home, or investment, up to 10 financed properties. Non-owner-occupied needs 15–25% down. This flexibility is a key edge over FHA/VA/USDA.
What are the HomeReady/Home Possible rules?
Income at or below 80% AMI, primary residence only, and a homeownership course if all occupying borrowers are first-timers. In return: 3% down, gifts allowed, and cancelable PMI.
How long after bankruptcy or foreclosure?
Roughly 4 years after Chapter 7, 2 after Chapter 13 discharge, 4 after short sale/deed-in-lieu, and 7 after foreclosure — with re-established credit. Extenuating circumstances can shorten some. FHA waits are shorter.
Which properties qualify?
1–4 units, warrantable condos, PUDs, co-ops, and permanent-foundation manufactured homes. Non-warrantable condos and unusual properties may need a portfolio or non-QM loan.
What if I don't qualify?
There's usually another path — FHA, jumbo, foreign national, VA, or non-QM. A broker matches your profile to the right one.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.