Conventional loans offer Danville homebuyers maximum flexibility—work anywhere in the city (no location restrictions like USDA), no income limits, and mortgage insurance that actually cancels at 20% equity (unlike FHA's lifetime MI). With Danville's median home price at $152,450, conventional loans deliver exceptional long-term value for buyers with good credit (680+) and 5-20% down payment—and the low prices make down payments surprisingly achievable.
This guide covers everything Danville buyers need to know about conventional financing: requirements, current rates, PMI costs, down payment options, and when conventional beats FHA, VA, or USDA in Danville's accessible, buyer-friendly market.
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Conventional loans offer Danville homebuyers maximum flexibility—work anywhere in the city (no location restrictions like USDA), no income limits, and mortgage insurance that actually cancels at 20% equity (unlike FHA's lifetime MI). With Danville's median home price at $152,450, conventional loans deliver the best long-term value for buyers with good credit (680+) and 5-20% down payment.
Unlike FHA's lifetime MI ($65-75/month forever), conventional PMI disappears at 20% equity (timeline varies by purchase timing and market conditions). Save $20,000-$25,000 over loan life.
5-20% options ($7,623-$30,490 on $152,450 median). Danville's low prices make conventional down payments achievable where they'd be impossible in expensive markets.
Works anywhere—North Danville, South Danville, Old West End, Schoolfield. USDA doesn't work in city proper.
Earn $60K or $200K—doesn't matter (USDA caps at $119,850)
680+ credit gets best rates, saving thousands
Principal payments + market conditions determine when you reach 20% equity. Timeline varies significantly based on purchase timing—2020-2022 buyers likely already have 20%+ equity, while recent buyers may need 4-6+ years. Then PMI drops off permanently.
30-Year Fixed: 6.28%-6.40%
15-Year Fixed: 5.49%-5.72%
5/1 ARM: 6.10%-6.50%
| Credit Score | Rate | Monthly P&I | Total 30-Year Interest |
|---|---|---|---|
| 760+ | 6.28% | $863 | $170,680 |
| 720-759 | 6.35% | $873 | $174,280 |
| 680-719 | 6.50% | $888 | $179,680 |
| 640-679 | 6.75% | $908 | $186,880 |
| 620-639 | 7.00% | $932 | $195,520 |
Danville Credit Reality: Even 0.25% difference costs $7,200 over 30 years on median home. Improving credit from 680 to 720 saves $16,000+.
Why this matters in Danville: Lower loan amounts mean smaller absolute dollar differences, but percentages still matter. 720 vs 640 credit = $360/year difference on $152,450 loan. That's real money in an affordable market.
Understanding conventional loan requirements helps you determine if this flexible option works for your Danville home purchase.
Danville advantage: With lower loan amounts ($152,450 median), even 680 credit gets approval easier than expensive markets where $350K+ loans require 720+ credit.
Conventional loans offer flexible down payment options from 3% to 20%.
Cannot Use: Unsecured borrowed funds (personal loans, cash advances)
Standard: 43% DTI maximum
With Compensating Factors: Up to 50%
Scenario: Single buyer, $52,000/year
Result: Can afford above-median Danville homes comfortably with conventional loan.
Required: 2 years steady employment
Sovah Health, Danville Regional Medical Center, Goodyear, Averett University, Institute for Advanced Learning and Research provide stable W-2 income ideal for conventional loan qualification.
$152,450 home, 10% down, 700 credit = 2 months reserves ($2,280) recommended.
Reserves = PITI × 2 months
Danville advantage: Lower monthly payments ($1,140 typical) mean lower reserve requirements ($2,280 vs $4,000+ in expensive markets).
PMI is required if down payment is less than 20%, but it cancels automatically at 20% equity—huge advantage over FHA.
| Credit Score | Annual PMI Rate | Monthly PMI |
|---|---|---|
| 760+ | 0.50% | $57 |
| 720-759 | 0.65% | $75 |
| 680-719 | 0.85% | $98 |
| 640-679 | 1.15% | $132 |
| 620-639 | 1.50% | $172 |
| Credit Score | Annual PMI Rate | Monthly PMI |
|---|---|---|
| 760+ | 0.45% | $49 |
| 720-759 | 0.60% | $65 |
| 680-719 | 0.75% | $82 |
| 640-679 | 1.00% | $109 |
| 620-639 | 1.25% | $136 |
Key Insight: 10% down + good credit drastically reduces PMI. 760 credit with 10% down pays $49/month vs $172/month for 620 credit with 5% down—$123/month difference = $44,280 over 30 years.
Danville context: Even "high" PMI ($98/month for 680 credit, 5% down) is affordable in Danville's market. That's less than many spend on cable/streaming.
PMI cancellation timeline depends on purchase timing and market conditions:
⚠️ Important: Timeline Varies by Purchase Year
Danville Strategy: 10% down ($15,245) is sweet spot—achievable down payment, reasonable PMI ($65-85/month), cancels in 4-6 years typically. Total PMI paid: $3,000-$5,000 vs FHA's $23,400 lifetime MI.
Accessibility: Single earner at $35K-40K can buy entry-level Danville home with 10-20% down.
Key takeaway: Even 20% down ($29,000) results in payment under $1,000/month. Incredibly affordable homeownership.
Move-up market accessibility: Dual-income household earning $55K-60K combined can afford Danville's move-up properties.
Typical Range: $3,000-$6,000 (2-4% of purchase price)
Danville advantage: Lower home prices = lower percentage-based fees (title insurance, recording fees calculated on loan amount).
You're Ideal Conventional Candidate If:
| Feature | Conventional 5% | FHA 3.5% |
|---|---|---|
| Down payment | $7,250 | $5,075 |
| Upfront fee/MI | $0 | $2,449 |
| Monthly MI | $75 (cancels) | $65 (lifetime) |
| Monthly payment | $1,146 | $1,140 |
| 6-year MI cost | $5,400 | $4,680 |
| 30-year MI cost | $0 (cancels year 8) | $23,400 |
| Cash needed | $10,250 | $8,075 |
Conventional Wins:
FHA Wins:
Danville verdict: With 680+ credit and 7+ year ownership, conventional saves $15,000-20,000 over FHA. Worth the extra $2,175 down payment.
| Feature | Conventional 5% | VA $0 Down |
|---|---|---|
| Down payment | $7,250 | $0 |
| Monthly MI | $75 | $0 |
| Monthly payment | $1,146 | $1,246 |
| Cash needed | $10,250 | $3,000-$4,500 |
| 30-year cost | $412,560 | $448,560 |
Conventional Wins:
VA Wins:
Danville verdict: If VA eligible, use VA (save $7,250 upfront even though monthly is higher). If not eligible, conventional is excellent option.
| Feature | Conventional 5% | USDA $0 Down |
|---|---|---|
| Down payment | $7,250 | $0 |
| Income limits | None | $119,850 |
| Location | Anywhere | Pittsylvania County only |
| Monthly payment | $1,146 | N/A (not eligible in city) |
Conventional Wins:
USDA Wins:
Danville verdict: Buying in city? Conventional is your option. Buying in rural Pittsylvania? USDA beats conventional if you qualify.
Mistake: Mistake: High PMI ($132/month) + high rate (6.75%). Total extra cost: $25,000+ over loan life.
Fix: Fix: Wait 6-12 months to improve credit to 680+ OR save for 10% down. Reduces PMI to $82-109/month + better rate.
Mistake: Mistake: Accepting first quote without comparison. Reality: Lenders vary 0.25-0.50% on rates. On $152,450 loan = $7,200-$14,400 over 30 years.
Fix: Fix: Get quotes from 3-5 lenders. Compare rates AND fees.
Mistake: Mistake: Assuming PMI lasts forever like FHA. Reality: PMI cancellation timeline varies significantly by purchase timing. With 5% down, typically 6-8 years. With 10% down, typically 4-6 years. Recent buyers may need longer.
Fix: Fix: Make extra principal payments to reach 20% equity faster if possible. Every year earlier = $780-$900 saved. Always verify current home value before assuming 20% equity.
Mistake: Mistake: Assuming FHA is always better for low down payment. Reality: If you have 680+ credit and can save $7,250 (5% down), conventional often wins on 7+ year ownership.
Fix: Fix: Run both scenarios side by side. Compare total MI cost over expected ownership period.
Mistake: Mistake: Paying all closing costs yourself. Reality: Conventional allows 3% seller concessions (10%+ down) or 6% (5-9% down). On $152,450 home = $4,574-$9,147.
Fix: Fix: Always ask for 3-4% seller concessions in offer. In Danville's buyer-friendly market, sellers often agree.
Mistake: Mistake: Choosing loan with lowest monthly payment without considering total cost. Reality: FHA might have $6/month lower payment but costs $18,000 more in MI over 30 years.
Fix: Fix: Compare total cost including MI over expected ownership period, not just monthly payment.
Perfect for: Removing FHA lifetime mortgage insurance
Original FHA (2020):
Current situation (2025):
Not quite 20% yet—wait 1-2 years
Once at 20% equity ($30,490):
Worth it if: Refinance costs less than $2,500 (break-even in 3 years)
When: Current rate 0.75-1.0%+ higher than available rates
When: Need to access equity for debt consolidation, home improvements, emergency fund
Current situation:
Cash-out refinance:
Monthly savings: $300 (eliminated high-interest credit card payments) - $106 (higher mortgage payment) = $194 net monthly savings
Minimum: 620. Recommended: 680+ for competitive rates. Ideal: 720+ for excellent rates and low PMI. Danville reality: With lower loan amounts, 680 credit is sufficient for most buyers. 720+ gets best deals but isn't required.
Depends on your situation: 5% ($7,250): If that's all you've saved, works but higher PMI. 10% ($14,500): Sweet spot—lower PMI, faster cancellation, achievable savings. 20% ($29,000): No PMI, best rates, worth it if you have savings. Danville recommendation: Aim for 10% if possible. Gets most benefits without tying up excessive cash.
Yes, but not ideal. Better options: 1) Wait 6-12 months, improve credit to 680+ (save $150/month in rate/PMI). 2) Save for 10% down instead (reduces PMI significantly). 3) Consider FHA if credit improvement difficult. 660 credit + 5% down = High rate (6.65%) + high PMI ($105/month). Total extra cost vs 700 credit: $18,000 over 30 years.
PMI cancellation timeline depends on purchase timing and market conditions: 5% down + principal paydown + market stability = typically 6-8 years to 20% equity. Recent market volatility means actual timeline varies. 10% down + principal paydown = typically 4-6 years to 20% equity. Request PMI removal once you believe you've reached 20% equity (requires appraisal).
Yes, two ways: 1) Request removal at 20% equity (requires appraisal, $400-550 cost). 2) Automatic removal at 20% equity (based on original schedule). 3) Mandatory removal at 22% equity (by law). Danville strategy: If you've made extra payments or home appreciated faster than expected, request removal at 20% with new appraisal. Saves PMI costs earlier.
Conventional is better if: Credit 680+ (get good rates), Can save 5-10% down ($7,250-$14,500), Planning 7+ year ownership (PMI cancellation matters), Want lowest total cost. FHA is better if: Credit 580-679 (easier approval), Only 3.5% down saved ($5,075), Planning 3-5 year ownership (less MI paid before selling), Need lower down payment now. Run both scenarios with lender to compare total costs over expected ownership period.
With 680+ credit and 5-20% down, conventional loans offer the best long-term value in Danville. PMI cancellation at 20% equity (timeline varies by purchase timing) saves $15,000-$20,000 vs FHA's lifetime MI, making conventional ideal for buyers planning 7+ year ownership in their Danville home.
Key advantage: Danville's affordability ($152,450 median) makes conventional down payments achievable where they'd be impossible in expensive markets. 10% down = $15,245 (2-3 years savings for many) vs $27,800 in Lynchburg or $55,000+ in Northern Virginia. Conventional accessibility in Danville is exceptional.
Perfect for: Buyers with good credit (680+), stable income, modest savings ($7K-$30K), planning to stay 7+ years, wanting maximum flexibility and lowest long-term cost.
Ready to buy a Danville home with a conventional loan? Get matched with lenders who understand the local market and can help you secure the best rates and terms.
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Last updated: December 4, 2025
About Danville, VA: Danville is an independent city in Southern Virginia with a population of approximately 42,000. The median home price as of October 2025 is approximately $152,450, representing 65% below the national average. The market is somewhat competitive (47/100) with homes selling in approximately 56 days on average, typically selling about 6% below list price (92.9% sale-to-list ratio). Property taxes are $0.83 per $100 of assessed value. Major employers include Sovah Health, Danville Regional Medical Center, Goodyear, and Averett University. Conventional loans work exceptionally well in Danville due to affordable home prices making down payments achievable ($7,623 for 5%, $15,245 for 10%, $30,490 for 20% on median home). With good credit (680+) and PMI cancellation timeline varying by purchase timing, conventional loans offer the best long-term value for Danville buyers planning extended ownership.
Market Data Accuracy: Home prices, market statistics, and appreciation rates are based on available data as of December 2025 and are subject to change. Danville's market has shown significant volatility (2020-2025), and past performance does not guarantee future results. Always verify current home values, market conditions, and loan requirements with licensed real estate and mortgage professionals before making decisions.
Disclaimer: This guide provides general information about conventional loans in Danville, Virginia as of December 2025. Loan requirements, rates, and program details change frequently. This website generates leads for mortgage lenders and receives compensation for referrals. Always verify current rates, terms, and requirements with licensed mortgage lenders. Compare offers from multiple lenders before choosing. Consult with mortgage professionals and financial advisors before making home financing decisions.