What is the maximum percentage of the purchase price that can typically be financed using a conventional loan?

The maximum percentage of the purchase price that can typically be financed using a conventional loan is 97%. This means that borrowers can potentially secure a loan for almost the entire price of the home, allowing them to put down as little as 3% in the form of a down payment. Such financing options enable a broader range of buyers to enter the housing market, especially first-time homebuyers who may have limited savings for a down payment.

Conventional loans are not insured or guaranteed by the government, like FHA or VA loans, which often have different financing limits and criteria. The higher loan-to-value ratio available with conventional loans, up to 97%, reflects the increased availability in the lending market and the competitive nature of conventional loan products designed to meet diverse consumer needs.

Other financing options generally do not allow for such a high percentage of financing relative to the purchase price, thereby requiring larger down payments and limiting access for some potential buyers. Thus, the choice of 97% financing aligns with current lending practices within the realm of conventional loans.