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Edited and reviewed by CEO Vatche Saatdjian — 30+ years of experience — Expert on Conventional loans
Buy a Nevada home with as little as 3% down using conventional financing. Skip FHA's upfront fees and lifetime mortgage insurance – conventional low down payment loans offer better terms, easier PMI removal, and more flexibility for qualified buyers.
Senior Mortgage Consultant | 15+ Years Nevada Lending Experience
Robert specializes in low down payment conventional financing for Nevada homebuyers. Licensed Nevada mortgage professional since 2009, he has helped over 2,400 Nevada families secure conventional loans with competitive rates. Robert holds the Certified Mortgage Planning Specialist (CMPS) designation and regularly provides guidance on HomeReady, Home Possible, and standard conventional programs for first-time and repeat buyers across Las Vegas, Henderson, and Reno markets.
Both allow low down payments, but conventional loans often beat FHA for qualified buyers.
| Feature | Conventional 3-5% | FHA 3.5% |
|---|---|---|
| Minimum Down Payment |
3% (HomeReady/Home Possible) 5% (standard) |
3.5% |
| Minimum Credit Score | 620-640 | 580 (lower accepted) |
| Upfront Mortgage Insurance | $0 | 1.75% of loan (~$7,000) |
| Monthly PMI/MIP |
$50-200/mo (varies by LTV/credit) |
$100-250/mo (fixed percentage) |
| PMI Removal |
Automatic at 78% LTV Request at 80% LTV |
Lifetime (if <10% down) 11 years (if 10%+ down) |
| Interest Rates | Typically 0.25-0.5% lower | Slightly higher rates |
| Maximum DTI Ratio | 43% (45% with compensating factors) | 50%+ possible |
| Property Conditions | Flexible - cosmetic issues OK | Stricter appraisal standards |
| Gift Funds for Down Payment |
100% (if 20% total) Must contribute 5% (if <20%) |
100% allowed |
May require higher reserves or lower DTI
Wider program availability, better pricing
Lower PMI rates, more flexibility
Maximum program flexibility
Credit improvement tip: Raising your score from 640 to 740 can save $50-100/month on PMI alone.
Total debt ÷ gross monthly income
Or pay down debts before applying
Calculate your DTI:
(Car + Student Loans + Cards + Proposed Mortgage) ÷ Gross Monthly Income = DTI%
Use DTI CalculatorCommon questions about 3-10% down conventional mortgages in Nevada.
Yes! Conventional loans allow down payments as low as 3% through programs like Fannie Mae's HomeReady and Freddie Mac's Home Possible. Standard conventional financing also allows 5% down for most qualified buyers.
While 20% down avoids PMI entirely, putting down 3-10% lets you buy sooner while building equity instead of paying rent. PMI on conventional loans is typically lower than FHA's MIP and drops off automatically once you reach 78% loan-to-value ratio.
Most lenders require a minimum 620 credit score for 3% down conventional loans (HomeReady/Home Possible programs). However, 640+ gives you better pricing and more lender options. For 5% down standard conventional, most lenders prefer 620-640 minimum.
Higher credit scores (700+, 740+) qualify for significantly lower PMI rates and better interest rates, potentially saving $100-200/month compared to borrowers with 620-680 scores on the same loan amount.
PMI on a 5% down conventional loan typically ranges from $100-175/month on a $400,000 loan, depending on your credit score. With excellent credit (740+), expect the lower end. With fair credit (620-680), expect the higher end.
PMI cost factors include:
The good news: PMI automatically drops off at 78% LTV (typically 7-10 years with normal payments), or you can request removal at 80% LTV. FHA's MIP, by comparison, stays for 11 years minimum or the life of the loan.
Yes, but with limitations depending on your down payment amount:
Gift funds must come from acceptable sources (immediate family typically) and require a gift letter stating the funds are a gift, not a loan. You'll also need to document the transfer into your account.
PMI on conventional loans can be removed in three ways:
With a 5% down payment (95% LTV), you'll typically reach 80% LTV in 7-9 years with normal payments and moderate appreciation. You can accelerate this by making extra principal payments or if your home appreciates significantly.
For most Nevada counties, HomeReady and Home Possible programs require that your household income does not exceed 100% of the Area Median Income (AMI). In some designated low-income census tracts, there may be no income limit at all.
Nevada 2025 approximate income limits by area:
If you exceed these limits, you can still do a 5% down standard conventional loan with no income restrictions.
Note: Income limits are updated annually and vary by county and household size. Contact us for current limits for your specific situation.
If you qualify for both (620+ credit, DTI under 43%), 5% down conventional is usually better because:
FHA still makes sense if:
Speak with a Nevada conventional loan specialist • No obligation
See actual monthly payments for different down payment amounts on a $450,000 Nevada home (median price).
| Down Payment | Amount Down | Loan Amount | PMI/Month | Total Payment | PMI Drops At |
|---|---|---|---|---|---|
| 3.5% FHA (for comparison) | $15,750 | $434,250 |
$185 + $7,599 upfront |
$3,041 | Lifetime |
| 3% Conventional | $13,500 | $436,500 | $182 | $2,987 | @78% LTV |
| 5% Conventional ✓ | $22,500 | $427,500 | $142 | $2,891 | @78% LTV |
| 10% Conventional | $45,000 | $405,000 | $81 | $2,688 | @78% LTV |
| 20% Conventional | $90,000 | $360,000 | $0 | $2,437 | No PMI |
Assumptions: $450,000 purchase price, 7.0% rate, 30-year fixed, includes P&I + PMI/MIP only (taxes/insurance vary by location)
Key insight: 5% down conventional saves $150/month vs FHA ($1,800/year) with no upfront fee + PMI drops automatically
No upfront MIP with conventional
Lower monthly MI (5% down example)
With 5% down conventional:
Lower loan amount = faster equity:
Multiple options for Nevada buyers who don't have 20% down but want better terms than FHA.
Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow just 3% down for first-time buyers and qualified repeat buyers.
Traditional conventional financing with 5% down payment – most common option for buyers who don't qualify for 3% programs.
Put down 10% to significantly reduce PMI costs while still keeping cash for reserves, renovations, or investments.
Choose 3% if:
Choose 5-10% if:
Pro tip: Consider using gift funds to boost your down payment from 3-5% up to 10% or even 20% to eliminate PMI entirely.
Nevada's trusted conventional mortgage lender serving Las Vegas, Henderson, Reno and all of Nevada with competitive rates and expert guidance.
3% down, competitive rates, flexible terms
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fhahomeloans.services →$0 down, no PMI, for veterans & military
vahomeloans.services →$0 down, rural properties, income limits apply
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Valley West Mortgage - NMLS #65506
Nevada Mortgage Lender License
Licensed to conduct business in Nevada
NMLS Consumer Access: www.nmlsconsumeraccess.org
We are an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and Equal Credit Opportunity Act. This company does not discriminate on the basis of race, color, religion, national origin, sex, marital status, age, or handicap.
This is not a commitment to lend. All loans subject to credit approval. Rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. Additional restrictions may apply. Property insurance required. Flood insurance may be required. This website is for informational purposes only and does not constitute financial advice. Consult with a licensed loan officer for personalized guidance.