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Los Angeles spans every price tier from $400K condos to $15M estates. Conventional loans work across this range, splitting into conforming (up to $832,750) and jumbo for higher amounts.
Most LA buyers choose conventional financing for the rate advantage and flexibility. You avoid mortgage insurance faster than FHA and qualify for better terms with strong credit.
You need 620 minimum credit for most conventional loans, but expect 3% down programs around 680+ and best pricing at 740+. Income matters less than debt-to-income ratio, typically capped at 50%.
Self-employed borrowers qualify with two years of tax returns showing stable income. W-2 earners provide recent pay stubs and two years of W-2s. Lenders verify assets to cover down payment plus reserves.
Over 200 lenders price conventional loans differently based on your profile. A 5% down loan prices worse at one lender, better at another depending on their investor appetite that week.
Credit unions often beat banks on smaller loans under $500K. Wholesale lenders through brokers typically win on jumbos and complex income scenarios. Direct lenders charge more for convenience you don't need.
LA buyers waste money putting 20% down on conforming loans when 10% performs identically after PMI costs. Run the math — PMI at $150/month beats tying up $80K in equity.
Jumbo loans flip this logic. Lenders price 20% down significantly better than 10% on amounts over $1M. The rate difference outweighs PMI savings in reverse.
FHA requires just 3.5% down but charges MIP for the loan's life on most purchases. Conventional at 5% down costs less monthly and drops PMI after a few years of appreciation.
Jumbo conventional handles LA's higher prices where conforming loans cap out. You pay 0.25-0.75% more in rate versus conforming, but it's your only option above $832,750 without portfolio products.
LA's condo market requires lender approval of HOA financials and owner-occupancy ratios. Many buildings don't qualify for conventional financing due to commercial space or litigation. Verify before writing offers.
Earthquake insurance isn't required but lenders scrutinize properties in liquefaction zones. They order geological reports on hillside homes, adding two weeks to close timelines in areas like Silver Lake or Pacific Palisades.
You need 620 minimum credit, but 740+ gets best rates. The spread between 620 and 760 credit costs about 1.5% in rate on typical LA loan amounts.
Primary homes qualify with 3% down if you're a first-time buyer, 5% otherwise. Investment properties require 15-25% down depending on loan size.
The 2026 conforming limit is $1,249,125 for single-family homes. Loans above this amount are jumbo loans with different pricing and requirements.
Yes, with two years of tax returns showing stable or increasing income. Lenders average your net income after deductions, so write-offs reduce buying power.
You pay monthly PMI with less than 20% down, typically $50-200 per month. It drops automatically when you hit 78% loan-to-value through payments or appreciation.
Condos with under 50% owner occupancy, buildings with major deferred maintenance, and properties with ongoing litigation typically don't qualify. Order HOA docs early.
Conventional Loans in Los Angeles