Conventional loans make homeownership accessible for Virginia residents with lower credit scores and minimal down payments. With as little as 3-20% down, competitive rates, and flexible credit requirements, Conventional loans have helped thousands of Virginians purchase homes across the Commonwealth.
An Conventional loan is a mortgage insured by the Federal Housing Administration, a government agency created in 1934 during the Great Depression to help Americans achieve homeownership. Unlike conventional loans, Conventional loans are designed specifically for borrowers who may not qualify for traditional financing due to lower credit scores, limited savings, or higher debt-to-income ratios.
The Conventional doesn't lend money directly—instead, it insures loans made by approved lenders. This insurance protects lenders against losses if borrowers default, allowing lenders to offer more favorable terms than they otherwise could.
Virginia presents unique opportunities for Conventional borrowers. With diverse housing markets ranging from affordable rural communities in Southwest Virginia to higher-cost Northern Virginia suburbs, Conventional loans adapt to meet different price points across the Commonwealth.
In 2025, Virginia Conventional loan limits range from $524,225 in most counties to $1,209,750 in high-cost areas like Arlington, Fairfax, and Loudoun counties. This flexibility makes Conventional loans accessible whether you're purchasing a starter home in Lynchburg or a townhouse in Alexandria.
Conventional loans require just 3-20% down for borrowers with credit scores of 620 or higher.
Minimum credit score is 620 (with 3-20% down) or 500 (with 10% down).
Rates are often comparable to or better than conventional rates for lower-credit borrowers.
Sellers can pay up to 6% of the purchase price toward your closing costs—double the conventional limit.
Conventional loans are assumable, meaning a future buyer can take over your existing mortgage at your interest rate. If you lock in a 6% Conventional rate in 2025 and rates climb to 8% by 2028, a buyer could assume your 6% loan—potentially making your home more attractive and valuable.
Conventional appraisers look for "Safety, Soundness, and Security".
Conventional loan limits vary by county based on local median home prices. Virginia has both standard and high-cost counties.
| County | 1-Unit Limit |
|---|---|
| Arlington, Fairfax, Loudoun | $1,209,750 |
| Prince William | $1,009,450 |
| Stafford | $673,900 |
Most Virginia counties have the base limit:
| Loan Term | Purchase Rate | Refinance Rate |
|---|---|---|
| 30-Year Fixed | 6.04% - 6.23% | 6.66% - 7.00% |
| 15-Year Fixed | 5.40% - 5.75% | 5.85% - 6.15% |
| 5/1 ARM | 5.75% - 6.10% | 6.00% - 6.35% |
*Rates vary by lender and borrower qualifications. These are national averages as of Nov 24, 2025.
Conventional rates are risk-based. Even though the government backs the loan, lenders adjust rates based on credit score tiers:
Compare at least 3-5 lenders. Even a 0.25% difference in rate can save thousands over the loan term. On a $250k loan, that 0.25% difference saves $14,400 over 30 years.
Pull your credit reports, check your score, and calculate your budget. Ensure your DTI is within limits.
Submit documents (W-2s, pay stubs, bank statements) to a lender to verify income and assets. You'll receive a pre-approval letter valid for 60-90 days.
Work with an agent familiar with Conventional requirements. Properties must be move-in ready. Negotiate seller concessions in your offer.
The lender orders an Conventional appraisal ($400-$700) to confirm value and safety standards. Common issues: peeling paint, missing handrails, roof damage.
The underwriter verifies everything. You might need to provide updated documents or explanation letters.
Sign documents, pay remaining costs, and get your keys! Timeline from offer to close is typically 30-45 days.
Of loan amount. Usually financed into the loan.
Paid monthly. For most 30-year loans.
Typical Conventional closing costs in Virginia run 3-6% of the purchase price.
Standard Conventional loans require homes to be "move-in ready." If you find a home in Virginia that needs repairs (like a new roof, kitchen update, or HVAC), you can use the Conventional 203(k) Rehabilitation Loan.
You borrow enough for the purchase price plus the renovation costs in a single loan with one monthly payment. The renovation funds are held in escrow and paid out to contractors as work is completed.
| Feature | Conventional Loan | Conventional |
|---|---|---|
| Min. Credit Score | 620 | 620 |
| Min. Down Payment | 3-20% | 3% |
| Mortgage Insurance | Life of loan | Cancels at 20% equity |
| Seller Concessions | Up to 6% | Up to 3% |
| Appraisal | More Strict | Standard |
Bottom Line: Conventional saves you $4,125 upfront and has a similar monthly payment, but the Mortgage Insurance is permanent. Conventional saves money long-term if you plan to keep the loan for 10+ years.
Why: You forget about closing costs (3-20%).
Solution: Budget 7-9% of purchase price total.
Why: Standard Conventional loans require move-in ready homes.
Solution: Look for homes in good condition or use a 203(k) loan.
Why: Buying furniture before closing ruins your DTI.
Solution: Freeze all spending until you have keys.
Why: You leave money on the table. Conventional allows 6%!
Solution: Ask sellers to pay your closing costs.
Why: MIP is for life. It adds up over 30 years.
Solution: Plan to refinance to conventional once you reach 20% equity.
Why: Clean 12-month history is crucial.
Solution: Pay everything on time for at least 1 year.
Why: Lenders want stability.
Solution: Don't change industries or pay structures during the process.
Why: Open disputes can stall Conventional underwriting.
Solution: Resolve disputes before applying.
Why: Conventional requires paper trails for all money.
Solution: Keep money in the bank. Document all gifts.
Why: Sellers won't accept Conventional offers without it.
Solution: Get a solid pre-approval letter first.
Competitive rates due to volume and advanced tech. Good for fast pre-approvals.
Better understanding of Virginia markets and flexible underwriting.
State agency offering Conventional loans with down payment assistance for eligible borrowers.
Typically 30-45 days from application to closing. Pre-approval takes 1-3 days.
Yes, scores as low as 500 (with 10% down) or 620 (with 3-20% down) are accepted. Most Conventional lenders prefer 620+.
Not with a standard Conventional loan—properties must be move-in ready. Consider an Conventional 203(k) loan for repairs.
Yes, 100% of your down payment can come from gifts from family, employers, or charities.
Only if you put 10% or more down (cancels after 11 years) or if you refinance to conventional.
Minimum 620 for 3-20% down. Most Virginia lenders prefer 600+.
Some prefer conventional due to stricter Conventional appraisals, but a strong offer still wins in competitive markets.
Yes, but the condo complex must be on the HUD-approved condo list. Check with your lender before making an offer.
Ready to explore Conventional financing for your Virginia home purchase? Connect with experienced Conventional lenders who understand Virginia's market and can guide you through the process.
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Last updated: November 25, 2025
Disclaimer: Virginia Lending Hub is a lead generation service connecting homebuyers with licensed mortgage professionals. We are not a lender and do not make credit decisions. Conventional loan terms, rates, and requirements subject to change. All loans subject to underwriter approval.