What Is a Conventional Loan?

A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. Lenders underwrite these loans based on private standards, which often include credit score, debt‑to‑income ratio, and the size of the down payment.

Typical Down‑Payment Percentages

Most conventional loans allow borrowers to put down as little as 3 % of the purchase price, provided they meet stricter credit and income requirements. A 5 % down payment is more common and still usually requires private mortgage insurance (PMI). Putting down 20 % or more eliminates PMI and can lower your interest rate.

Sources of Down‑Payment Funds

• Personal savings or checking accounts.
• Gifts from family members, documented with a gift letter.
• Qualified retirement accounts, such as a 401(k) or IRA, when rolled over according to IRS rules.
• State or local assistance programs that provide grants or low‑interest loans for first‑time buyers.

Nevada‑Specific Considerations

Nevada does not levy a state income tax, which can reduce the overall cost of homeownership compared with states that do. The state is also a community‑property jurisdiction, meaning that any down‑payment funds contributed by a spouse are generally considered joint property, which can affect how lenders verify the source of the money.

The Nevada Housing Division offers the HomeFirst program, which provides down‑payment assistance to eligible first‑time homebuyers. While the program is not a loan requirement, it can help qualified borrowers meet the 3 %–5 % threshold.

This article provides general information and should not be considered personalized financial or legal advice.