What is a conventional loan?
A conventional loan is any mortgage that is not backed by a government agency — it is not FHA-insured, not VA-guaranteed, and not USDA-guaranteed. Instead, conventional loans are underwritten to guidelines published by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), the two government-sponsored enterprises that buy most conforming U.S. mortgages on the secondary market.
Because the loan conforms to GSE guidelines, it can be pooled into mortgage-backed securities and sold — which is what lets lenders keep offering 30-year fixed rates at scale. When a Kansas buyer closes a conventional loan with Primary Residential Mortgage, Inc., the loan is typically delivered to Fannie Mae or Freddie Mac within weeks of funding. PRMI is a direct seller/servicer to both agencies, which removes the broker layer and speeds decisions.
Conventional loans break into two buckets: conforming (at or below the annual FHFA loan limit) and non-conforming / jumbo (above the limit). This page focuses on conforming conventional — the workhorse product for Kansas purchases.
Conventional loan requirements in Kansas
Credit score
The floor for a Kansas conventional loan is a 620 mid-score — the middle number of your Equifax, Experian, and TransUnion FICOs. Both Fannie Mae and Freddie Mac will underwrite to 620, but the pricing hits below 700 are meaningful. The tiers that matter in day-to-day pricing:
- 620–639: Eligible, but expect the worst conventional pricing — often worse than FHA at the same score.
- 640–679: Workable. Compare directly against FHA on a total-cost basis.
- 680–719: Mainstream conventional territory. Pricing improves in tiers.
- 720–739: Strong.
- 740–759: First “great” pricing tier.
- 760–779: Better.
- 780+: Best conventional pricing available.
Kansas buyers in the 620–680 band should always see an FHA-versus-conventional comparison before locking a program. We run both at pre-approval.
Down payment
Conventional down payment minimums in Kansas:
- 3% down (97 LTV): Available for first-time buyers through Fannie Mae HomeReady and Freddie Mac Home Possible, or standard Fannie Mae 97% / Freddie Mac HomeOne for first-time buyers without income caps.
- 5% down (95 LTV): Standard conventional minimum for repeat buyers and non-first-time-buyer scenarios.
- 10% down (90 LTV): Reduces monthly PMI materially; common structure for buyers stepping up from a starter home.
- 15% down (85 LTV): Further PMI reduction.
- 20% down (80 LTV): No PMI required. This is the structural break point for conventional.
- 25%+ down: Best pricing, strongest rate locks, standard for investment properties.
Gift funds from family members are permitted for the full down payment on primary residences. Seller concessions toward closing costs are capped by LTV: 3% on 90%+ LTV, 6% between 75.01–90%, and 9% at 75% or lower.
Debt-to-income (DTI)
Standard conventional DTI ceiling is 45%, with up to 50% allowed when compensating factors are present — typically strong credit, significant reserves, or a history of housing payments equal to or higher than the proposed payment. Fannie Mae’s Desktop Underwriter (DU) and Freddie Mac’s Loan Product Advisor (LPA) are the automated underwriting engines that make the final DTI call. We run both engines at pre-approval when a scenario is borderline.
Private mortgage insurance (PMI)
PMI is required on any conventional loan above 80% LTV. Kansas buyers have three structural choices:
- Borrower-paid monthly PMI (BPMI): Standard. Added to the monthly payment. Cancellable when the loan reaches 80% LTV (by request) and automatically terminates at 78% LTV per the Homeowners Protection Act.
- Single-premium PMI: Paid as a lump sum at closing (often financeable into the loan). Good fit for buyers who plan to hold the loan long enough to amortize the premium.
- Lender-paid PMI (LPMI): Built into the interest rate. Lower payment, but non-cancellable without refinancing.
The cancellability of conventional PMI is the single biggest structural advantage over FHA. FHA’s MIP is permanent for the life of the loan on most new FHA loans with less than 10% down — a cost that does not go away even at 50% equity.
Property types
Conventional loans finance the widest range of Kansas property types of any program:
- Primary residence: Single-family, 2–4 unit, condo, PUD, townhome, manufactured home (with restrictions).
- Second home: Must be a reasonable distance from the primary, borrower-occupied part of the year, not a rental. Minimum 10% down.
- Investment property: Non-owner-occupied rentals up to four units. Minimum 15% down on one-unit, 25% on 2–4 unit.
First-time homebuyer conventional programs
Kansas first-time buyers (defined by Fannie Mae and Freddie Mac as someone who has not owned a primary residence in the past three years) have two dedicated 3%-down conventional programs:
Fannie Mae HomeReady
HomeReady is Fannie Mae’s affordable conventional product. Highlights:
- 3% minimum down payment (97 LTV).
- Income limit: 80% of area median income (AMI) for the property’s county. In Reno County, Sedgwick County, and most of rural Kansas, this is a meaningful majority of first-time buyers.
- Reduced PMI pricing compared with standard 97 LTV conventional — often the deciding factor in an FHA-vs-conventional comparison.
- Non-occupant co-borrower income allowed (a parent can co-sign and have their income counted without living in the home).
- Homeownership education course required for at least one borrower (online, one-time, inexpensive).
Freddie Mac Home Possible
Home Possible is Freddie’s mirror product. Structurally similar, but runs through LPA instead of DU. Highlights:
- 3% minimum down payment (97 LTV).
- Income limit: 80% AMI.
- Reduced PMI.
- Flexible down payment sources — gifts, grants, secondary financing.
- Good fit when DU returns an “Approve/Ineligible” and LPA accepts the file.
Fannie Mae 97% / Freddie Mac HomeOne
If your income exceeds 80% AMI but you are still a first-time buyer, these are the fallback 97 LTV products. Same 3% down, no income cap, but standard PMI pricing rather than reduced. Often the best route for dual-income Johnson County or Overland Park first-time buyers who earn above AMI.
2026 Kansas conforming loan limits
The Federal Housing Finance Agency (FHFA) sets conforming loan limits annually based on national home-price changes. For 2026, the baseline limits that apply across Kansas are:
| Property Type | 2026 Kansas Baseline Limit |
|---|
| 1-unit (single-family) | $806,500 |
| 2-unit (duplex) | $1,032,650 |
| 3-unit (triplex) | $1,248,150 |
| 4-unit (fourplex) | $1,551,250 |
No Kansas county carries a high-cost designation in 2026 — every county uses the baseline figures above. Loans above these limits cross into jumbo territory with different underwriting (typically 700+ credit, 10–20% down, and full documentation of reserves).
Conventional vs FHA — the real comparison
Most Kansas buyers comparing programs are comparing conventional against FHA. The honest answer depends on credit score, down payment, and time horizon. The five points that actually drive the decision:
| Factor | Conventional | FHA |
|---|
| Mortgage insurance cancellability | PMI cancels at 80% LTV (auto at 78%) | MIP permanent for life of loan if <10% down; 11 years if 10%+ down |
| Credit score pricing | Tiered via LLPAs — 740+ priced materially better than 620 | Flatter — 580 and 720 price closer together |
| Property condition | More lenient appraisal standards | HUD Minimum Property Standards (MPS); peeling paint, handrails, roof life all matter |
| DTI limits | 45% standard, up to 50% with compensating factors | 46.99/56.99% with AUS approval — similar ceiling in practice |
| Upfront costs | No upfront mortgage insurance premium | 1.75% UFMIP financed into the loan |
Rule of thumb for Kansas buyers: if your credit is 700+ and you plan to stay in the home long enough for PMI to cancel (typically 5–8 years with standard amortization plus Kansas appreciation), conventional usually wins on total cost. If your credit is 620–680 or the property has condition issues, FHA often wins despite the lifetime MIP. Run both — we do it on every file.
Conventional loan for investment property or second home in Kansas
Conventional is the only mainstream financing option for Kansas investment property and second homes — FHA, VA, and USDA all require owner occupancy. Structure:
- Second home: 10% minimum down. Must be borrower-occupied part of the year, not rented full-time, reasonable distance from primary. Pricing adjustment applies but modest.
- Investment property, 1-unit: 15% minimum down (20% typical for best pricing). LLPAs for non-owner-occupancy are meaningful — expect roughly 0.75–1.00% in points at 20% down versus a primary-residence loan at the same score.
- Investment property, 2–4 unit: 25% minimum down. Rental income from the subject property can count toward qualification (75% of market rent per appraiser).
- Reserves: 2–6 months of PITI required in reserves depending on number of financed properties.
Kansas investors routinely use conventional financing to acquire small-multifamily in Wichita, Topeka, and Kansas City metro. The 10-property cap under Fannie Mae’s multiple-financed-properties rule allows most local investors to scale before moving to portfolio or DSCR products.
Kansas-specific considerations
Johnson County and the jumbo threshold. Overland Park, Leawood, and Olathe have the highest concentration of purchases that push up against the $806,500 conforming limit. Structuring a 2026 Johnson County purchase in the $800K–$900K band often comes down to whether the buyer brings enough cash to stay conforming (which keeps pricing and PMI flexibility intact) or crosses into jumbo. We model both routes.
Wichita appraisal trends. Sedgwick County appraisals have normalized after the 2021–2023 run-up, but comp selection in older east Wichita neighborhoods remains nuanced — mixed vintages within a half-mile can swing a value materially. Conventional appraisals have more latitude than FHA here, which is one reason conventional sometimes clears a deal that FHA cannot on the same property.
Rural conventional limits. Conventional loans have no rural restriction — unlike USDA, which requires the property to be in an eligible rural census area. For Kansas buyers in towns just outside USDA eligibility maps (parts of Derby, parts of Valley Center, growing edges of Manhattan and Lawrence), conventional is often the default.
Property tax escrow. Kansas property taxes pay in arrears — half in December, half in May. Conventional escrow setup handles this cleanly, but closing timing affects the initial escrow deposit. A September Hutchinson closing requires a larger initial escrow than a February closing on the same property.
Wind and hail insurance. Kansas ranks top-five nationally for wind and hail claims. Conventional loans don’t impose special insurance requirements beyond standard hazard coverage, but homeowner premiums can move the all-in monthly payment by $100+. We underwrite to a conservative insurance estimate so pre-approvals hold when the binder comes in.
LLPAs and why credit score matters more on conventional
Loan Level Price Adjustments (LLPAs) are the reason two Kansas buyers with identical incomes and identical down payments can see different conventional rates. LLPAs are risk-based pricing adjustments published by Fannie Mae and Freddie Mac that apply at the loan level based on:
- Credit score (tiered in 20-point bands from 620 to 780+)
- Loan-to-value (LTV)
- Occupancy (primary / second home / investment)
- Property type (single-family / 2–4 unit / condo / manufactured)
- Loan purpose (purchase / rate-term refi / cash-out refi)
- Special program flags (HomeReady, Home Possible, high-balance)
On FHA, pricing is much flatter — a 620 and a 760 FHA borrower see similar rate pricing on the same day. On conventional, the same spread can be substantial. This is why conventional is typically the better economic outcome for Kansas buyers with strong credit, and why FHA can win for buyers with credit events or lower scores even though FHA carries lifetime MIP.
We publish the tradeoff in plain English on our FHA vs Conventional in Kansas guide — worth reading before you pick a program.
The pre-approval path for a Kansas conventional loan
- 15-minute intake call. Credit goals, down payment, target price, timeline. No credit pull yet.
- Secure application. Online form with document upload.
- Tri-merge credit pull and AUS. DU and/or LPA runs. Decision returned typically same day.
- Pre-approval letter. Issued within 24 hours of complete file, defensible with Kansas listing agents.
- Offer, contract, lock.
- Appraisal, underwriting, clear to close.
- Closing. Typical 21–30 days from accepted contract.
Want to see the other Kansas programs side-by-side before committing? Start at our Kansas home loans overview, or compare directly to FHA and VA. Looking to refinance an existing mortgage into a conventional structure to drop PMI or shorten term? See our refinance options. Kansas City metro buyer? We work routinely with clients in Overland Park and across Johnson County. South-central Kansas? See Wichita.
