Conventional Loans in Southern California
A conventional loan is the most common type of mortgage in Southern California. If you have solid credit and a stable income, a conventional loan gives you flexible terms, competitive rates, and no government program restrictions.
GM Funding’s team in San Clemente helps Southern California buyers get approved for conventional loans fast. Whether you’re buying your first home, moving up, or refinancing — we make the process straightforward.
What Is a Conventional Loan?
A conventional loan is a mortgage not backed by a government agency like the FHA or VA. Most conventional loans conform to guidelines set by Fannie Mae and Freddie Mac — these are called conforming loans.
Because they follow standard guidelines, conventional loans are widely available, competitively priced, and work for a broad range of buyers and properties.
Why Choose a Conventional Loan?
- No upfront mortgage insurance premium — Unlike FHA loans, there is no upfront MIP fee
- PMI cancels automatically — Once you reach 20% equity, private mortgage insurance goes away
- Higher loan limits — Up to $1,249,125 in Orange, LA, and San Diego counties for 2026
- Works for primary, second, and investment properties — More flexible than FHA
- Down payments as low as 3% — For qualified first-time homebuyers
- Competitive rates — Especially for borrowers with 740+ credit scores
Who Is a Conventional Loan Right For?
| Buyer Type | Why Conventional Works |
|---|---|
| Buyer with good credit (620+) | Access to competitive rates and flexible terms |
| Buyer with 20% down | No PMI required, lower monthly payment |
| Move-up buyer | Higher loan limits than FHA in SoCal |
| Investment property buyer | FHA doesn’t allow investment properties |
| Second home buyer | Conventional allows vacation and second homes |
Conventional vs FHA — What’s the Difference?
| Feature | Conventional Loan | FHA Loan |
|---|---|---|
| Minimum credit score | 620 | 580 |
| Minimum down payment | 3% | 3.5% |
| Mortgage insurance | Only under 20% down, can be cancelled | Required for life of loan in most cases |
| Loan limits (SoCal 2026) | Up to $1,249,125 | Up to $1,249,125 |
| Investment properties | Allowed | Not allowed |
| Second homes | Allowed | Not allowed |
| Best for | Strong credit, more savings | Lower credit, less savings |
Conventional Loan Limits in Southern California
For 2026, the FHFA increased conforming loan limits across Southern California. Here are the current limits for our primary service areas:
| County | Standard Limit | High-Balance Limit |
|---|---|---|
| Orange County | $832,750 | $1,249,125 |
| Los Angeles County | $832,750 | $1,249,125 |
| San Diego County | $832,750 | $1,104,000 |
| Riverside County | $832,750 | $832,750 |
| San Bernardino County | $832,750 | $832,750 |
Loans above the standard limit but below the high-balance limit are called high-balance conventional loans. They carry a slightly higher rate than standard conforming loans but are still less expensive than jumbo financing. Loans above the high-balance limit require a jumbo loan.
How Do You Qualify for a Conventional Loan?
- Credit score of 620 or higher — 740+ gets you the best rates available
- Down payment of 3% or more — 20% eliminates PMI entirely
- Debt-to-income ratio below 45% — Some programs allow up to 50%
- Steady income — Two years of employment history preferred
- Property appraisal — Home must appraise at or above purchase price
Conventional Loans by City
We help buyers across Southern California get approved for conventional loans. Find your city here.
Red Flags to Avoid
- Don’t apply for new credit before or during your loan process — it lowers your score
- Don’t change jobs mid-application without telling your loan officer
- Don’t make large cash deposits without documentation — lenders will ask about them
- Don’t assume you need 20% down — you can qualify with as little as 3%
- Don’t confuse conventional with jumbo — if your loan exceeds county limits, different rules apply
Ready to Get Started?
Call GM Funding today at (800) 345-2044 or text us at (949) 385-3007 to find out if a conventional loan is right for you. Get pre-approved the same day and know exactly what you can afford before you start shopping.