Down Payment from 3%
First-time buyers may qualify with as little as 3% down. Repeat buyers typically need 5%.
PMI Is Removable
Unlike FHA, private mortgage insurance goes away once you reach 20% equity in your home.
Fixed or Adjustable
Choose from 15, 20, or 30-year fixed terms, or an adjustable rate if the timeline fits.
Investment Properties
Conventional financing works for primary residences, second homes, and investment properties.
No Upfront MIP
No upfront mortgage insurance premium. Unlike FHA loans, nothing extra is charged at closing.
Jumbo Options
Purchases above the 2026 conforming limit can be structured as a jumbo conventional loan.
Who Qualifies
Most lenders require a minimum credit score of 620, though scores of 700 or higher unlock the best rates. Debt-to-income ratios typically need to stay under 45%, and you will need two years of stable income history. Self-employed borrowers are eligible and documentation requirements apply. Not sure how much home you can afford? Run the numbers before you apply.
Conventional vs. FHA: What Actually Matters
The decision usually comes down to your credit score, down payment, and how long you plan to stay in the home. Conventional loans cost less over time for buyers with strong credit because PMI can be removed. FHA mortgage insurance stays for the life of the loan in most cases.
If your score is below 640, FHA may be the better entry point. Above that threshold, conventional often wins on total cost. Mike will run both scenarios side by side so you see the real numbers before you commit.
| Conventional | FHA |
|---|
| Min. Credit Score | 620 (700+ for best rates) | 580 (500 with 10% down) |
| Min. Down Payment | 3% (first-time) / 5% (repeat) | 3.5% |
| Mortgage Insurance | PMI removable at 20% equity | MIP required for life of loan |
| Upfront MIP | None | 1.75% of loan amount |
| Loan Limits (2026) | Conforming limit applies | FHA county limit applies |
Conventional Loans in Annapolis and Anne Arundel County
Home prices in Annapolis and across Anne Arundel County have held strong, with median values pushing past $500,000 in neighborhoods like Severna Park, Crofton, Edgewater, and Arnold. For most buyers in this market, a conventional loan is the straightforward fit. The purchase price stays within the conforming limit, the underwriting is clean, and there are no government program layers to work around. Mike works with buyers throughout Anne Arundel County every week and knows which lenders move efficiently when you are under contract.
The 2026 conventional conforming loan limit for Anne Arundel County is $832,750 for a single-family home. Most purchases in the Annapolis area fall under that ceiling, which means buyers can use standard conventional financing without moving into jumbo loan territory. If your purchase price comes in above that threshold, Mike can structure the deal as a jumbo conventional loan or look at a combination approach using a conforming first mortgage plus a second lien, depending on which option makes more sense for your numbers.
First-time buyers in Maryland may also be able to layer a conventional loan with the Maryland Mortgage Program (MMP), which offers down payment assistance and competitive fixed rates for eligible buyers. MMP requires a minimum 640 credit score for conventional loans and has income and purchase price limits that vary by county. Mike is an approved MMP lender and can walk you through whether you qualify and whether the numbers make sense compared to a straight conventional loan.
Whether you are buying in Arnold, Gambrills, Pasadena, Severna Park, Crofton, or closer to downtown Annapolis, the process looks the same. You need solid credit, documented income, and a lender who moves quickly when you find the right house.
If you are buying in Anne Arundel County and want to know exactly where you stand, the fastest way is a 10-minute call.
Frequently Asked Questions
What credit score do I need for a conventional loan in Maryland?
The minimum is 620, but scores of 700 or above get the most competitive rates. Mike will review your full credit picture and tell you exactly where you stand before you apply.
Can I put less than 20% down on a conventional loan?
Yes. Conventional loans allow down payments as low as 3% for first-time buyers and 5% for repeat buyers. PMI applies until you reach 20% equity but unlike FHA it is not permanent.
How long does it take to close a conventional loan in Maryland?
Most conventional purchases close in 30 to 45 days from application. Mike's process is built to keep things moving and he will set clear expectations from day one.
What is the conventional loan limit in Anne Arundel County for 2026?
The 2026 conforming loan limit for Anne Arundel County is $832,750 for a single-family home. That number is set by the FHFA and adjusted each year based on home price changes nationally. For most buyers in the Annapolis area, it covers the purchase price. That means you can use standard conventional financing and avoid the higher rates and stricter requirements that come with a jumbo loan. If you are buying a two-unit or multi-family property, the limit is higher. And if your purchase price comes in above $832,750, Mike can walk you through jumbo options or a combination loan structure that keeps the first mortgage inside the conforming limit.
Can I get a conventional loan in Maryland with a 580 credit score?
Not through standard conventional financing. The minimum credit score for a conventional loan is 620, and most lenders in practice want to see at least 640 before they will approve the file without conditions. A 580 score will likely steer you toward an
FHA loan, which has a lower threshold. FHA allows scores down to 580 with 3.5% down, or even 500 with 10% down. That is not a dead end. If your score is in the high 500s and you need to buy in the next 6 to 12 months, Mike can run both scenarios and tell you what it would take to get your score above 620 before you apply. Sometimes a short credit cleanup period saves you years of higher payments.
Is PMI required on all conventional loans in Maryland?
PMI is required when your down payment is less than 20% of the purchase price, but only until you reach 20% equity in the home. After that, you can request cancellation, and by law it must be removed automatically when you hit 22% equity based on your original purchase price and payment schedule. This is one of the main advantages of conventional over
FHA. FHA mortgage insurance stays for the life of the loan in most cases, which means you are paying it long after you have built real equity. On a conventional loan, it goes away. Depending on your credit score, PMI typically runs between 0.5% and 1.5% of the loan amount annually, split across your monthly payment.
What is the jumbo loan threshold in Maryland for 2026?
A purchase becomes a jumbo loan when the loan amount exceeds the conforming limit for that county. In most Maryland counties including Anne Arundel, that threshold is $832,750 in 2026. Borrowing above that amount puts you in jumbo territory, which means different underwriting standards, generally stronger credit and reserve requirements, and rates that price a bit higher. In high-cost counties like Montgomery, Prince Georges, Charles, Calvert, and Frederick, the limit is $1,249,125, so you have more room before you hit jumbo. If you are buying above the conforming limit in Anne Arundel County, Mike can structure the deal as a jumbo conventional loan or look at a combination approach depending on which option pencils out better for you.
How does a conventional loan compare to a USDA loan in Maryland?
USDA loans are zero-down and come with competitive rates, but they have two hard limits. The property has to be in an eligible rural or semi-rural area, and your household income has to fall under the USDA county-specific caps. A large portion of Anne Arundel County including most of the Annapolis metro does not qualify for USDA. If you are buying in a qualifying area and your income is within range, USDA is worth a serious look because the monthly cost often beats a conventional loan with PMI. If you are buying in Annapolis, Severna Park, Crofton, or similar suburban markets, conventional is the straightforward path. Mike can tell you in about two minutes whether your target area is USDA-eligible and which loan type will cost you less.
Can a self-employed borrower qualify for a conventional loan in Maryland?
Yes. Self-employed buyers qualify for conventional loans regularly, but the documentation requirements are different from what W-2 employees face. Lenders want to see two full years of self-employment history, two years of personal and business tax returns, a year-to-date profit and loss statement, and sometimes 12 months of business bank statements. The income used for qualification is typically based on your net income after deductions, which is where some self-employed buyers run into problems. Aggressive write-offs can lower the qualifying income even when cash flow is healthy. If your tax returns show lower income than what you actually bring in, Mike can look at bank statement loan options as an alternative, or help you understand what adjustments to your filing might change your qualifying picture before you apply.
Can I combine a conventional loan with Maryland down payment assistance?
In some cases, yes. The Maryland Mortgage Program (MMP) offers conventional loan options paired with down payment assistance. Options include a 0% deferred second mortgage of $6,000 or DPA equal to 3% of the first loan amount. MMP requires a minimum 640 credit score for conventional loans, a debt-to-income ratio under 50%, and completion of a homebuyer education course. There are also income and purchase price limits that vary by county. It is not the right fit for everyone, but for a first-time buyer in Anne Arundel County who has solid income but limited savings, it can close the gap on the down payment without a high-cost second lien. Mike is an approved MMP lender and can run the comparison against a straight conventional loan so you see exactly what each option costs month to month.
How much does PMI cost on a conventional loan in Maryland?
PMI on a conventional loan typically runs between 0.5% and 1.5% of the loan amount per year, split across your monthly payments. On a $400,000 loan, that is roughly $166 to $500 per month depending on your credit score, loan-to-value ratio, and the lender's PMI provider. The better your credit score, the lower your PMI rate. That is another reason borrowers above 740 tend to favor conventional over FHA even at lower down payments. The rate is quoted when you get your Loan Estimate and is locked in at closing. Once you reach 20% equity through payments, appreciation, or a combination of both, you can request removal. Mike will show you the full payment breakdown before you commit so there are no surprises at closing.
Still weighing renting vs. buying? Run the numbers with the Rent vs. Own calculator.
Conventional financing also works if you are looking to refinance an existing property.
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"Working with Michael was an absolute pleasure from start to finish. He and his team were knowledgeable, responsive, and genuinely worked in our best interest. They made the entire mortgage process clear and stress-free."
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Michael DeHaut Jr. | NMLS #202640 | Bay Capital Mortgage | Company NMLS #39610
2553 Housley Road Suite 200, Annapolis, MD 21401 | (240) 417-0591
Licensed in MD, VA, DC, PA, DE, WV, FL, NC & TN | Equal Housing Opportunity
