Current conventional guidelines, updated from one source.
Treat these as the program’s fixed points rather than an offer: the minimum down payment for a first-time buyer and for everyone else, the credit floor behind these pages, the leverage at which mortgage insurance begins and the points at which it ends, and the ratio an automated approval allows.
First-time buyer; 5% standard; 97% loan-to-value at the top
The agencies set the floor at 3% down for a first-time buyer and 5% for a repeat buyer, on a principal residence; the whole down payment may be a gift from a relative on a one-unit home, and twenty percent down removes mortgage insurance from the payment entirely.
Priced on the score; no agency minimum with an automated approval
620 is the working floor, a wholesale overlay rather than an agency rule, since Fannie Mae requires no minimum score for a loan the automated system approves and 620 only on a manual fixed-rate file. Above the floor, each step up in score lowers the cost of the loan and of the insurance.
Required above 80% LTV; removed at 80% by request, 78% automatically
Above 80% loan-to-value the loan carries private mortgage insurance; at or below it, none. The insurance cancels on request at 80% of the original value and automatically at 78%, which is the single largest structural difference from FHA, whose premium at full leverage lasts for the term.
With an automated approval; 36% to 45% on a manual file
Lenders compare total debt against gross income, with limits up to 50% on an automated approval and 36% to 45% on a manual file. The housing payment counted includes the mortgage insurance while it applies, which is why cancellation changes the ratio as well as the payment.
| Purpose | Occupancy and program | Maximum LTV |
|---|---|---|
| Purchase | One-unit principal residence, first-time buyer (fixed rate) | 97% |
| Purchase | One-unit principal residence, standard | 95% |
| Purchase | HomeReady / Home Possible (income limits apply) | 97% |
| Purchase | Two- to four-unit principal residence | 95% |
| Purchase | Second home | 90% |
| Purchase | Investment property, one unit | 85% |
| Purchase | Investment property, two to four units | 75% |
| Refinance | Limited cash-out (rate-and-term), one-unit principal residence | 95% |
| Refinance | Cash-out, one-unit principal residence | 80% |
| Refinance | Cash-out, two to four units, second home or investment | 75% |
| Combined LTV | Maximum contribution |
|---|---|
| above 90 percent | 3% of the sales price |
| 75.01 to 90 percent | 6% of the sales price |
| 75 percent or less | 9% of the sales price |
| investment property (any) | 2% of the sales price |
| Event | Waiting period |
|---|---|
| Chapter 7 or 11 bankruptcy | four years from discharge or dismissal (two years with documented extenuating circumstances) |
| Chapter 13 bankruptcy | two years from discharge; four years from dismissal (two with extenuating circumstances) |
| Multiple bankruptcy filings | five years when more than one filing within the past seven years |
| Foreclosure | seven years (three with extenuating circumstances, then limited to a principal residence or second home at 90 percent LTV, purchase or limited cash-out) |
| Deed-in-lieu, short sale or mortgage charge-off | four years (two with extenuating circumstances) |
Mortgage insurance: Fannie Mae reports that private mortgage insurance typically ranged from 0.58%–1.86% of the loan amount a year; the premium on a specific loan is priced by the insurer on the score, the leverage, and the coverage, and is never quoted here. Gifts from relatives may fund the entire down payment on a one-unit principal residence. HomeReady and Home Possible lend to 97% with income at or below 80% of the area median; HomeOne lends to the same leverage with a first-time buyer and no income limit.
Current conventional snapshot · updated October 3, 2026 · principal residences occupied within sixty days, second homes, and one- to four-unit investment properties · conforming limits apply by county and are confirmed by a Lendmire loan officer · above the limit, see the jumbo program · no prepayment penalty · Lendmire is a broker, never the lender.
Informational only; not a commitment to lend, an approval, or a quote. Every figure on this page is a program parameter read from Lendmire’s guideline source, built on the agencies’ published guides, and may change without notice; eligibility, the loan amount, the insurance, and the ratios depend on the credit profile, the property, the occupancy, and underwriting. The mortgage insurance estimate is editable and not a premium quote. Lendmire is a mortgage broker licensed in sixteen states for consumer mortgages. NMLS #2371349.
What a conventional loan is — and how the file is qualified.
A conventional loan is a mortgage written to the rules of Fannie Mae and Freddie Mac so a lender can sell it to them after closing. Those rules decide the leverage by occupancy, the credit standard, the insurance above the threshold, and the ratios, and the four cards below take a Bay City file apart along exactly those lines.
For the program overview, see Lendmire’s conventional loan program, or the statewide guide at Conventional Loans in Michigan; for the mortgage insurance cancellation rules, see the CFPB.
Leverage by occupancy and buyer
The down payment a Bay City buyer needs depends on three things: whether the home is a principal residence, a second home, or a rental; whether it is one unit or several; and whether the buyer counts as a first-time buyer. The snapshot table gives the answer for every combination the program allows.
Credit scores and automated underwriting
The automated system, DU on the Fannie Mae side and LPA on the Freddie Mac side, reads the whole credit file rather than a single number: the score, the depth of history, the recent events, and the seasoning after any derogatory event. The score it uses with more than one borrower is the average of the median scores.
Mortgage insurance that cancels
The federal cancellation rules are the quiet advantage of a conventional loan. The borrower can ask to drop the insurance when the balance reaches the request threshold, the servicer must drop it at the automatic threshold, and it cannot outlast the midpoint of the term. On an FHA loan at full leverage the premium stays for the life of the loan.
Ratios, reserves, and the DU finding
Total debt-to-income is the ratio that counts: the full housing payment, insurance included, plus every monthly obligation, against gross income. Automated approvals reach the higher ceiling in the snapshot; manual files are held to the lower pair, with the higher of the two needing the matrix’s credit and reserve criteria.
Every input below is yours: the Bay City price, the down payment, the buyer type, the term, the rate, the insurance estimate, and the escrows. The thresholds and the ratio ceiling come from the program; the payment, the insurance, and the cancellation month follow from the arithmetic.
Where Bay City buyers borrow — and how a conforming loan fits.
The leverage limits are percentages; the market turns them into dollars. The Census figures below describe Bay City’s ownership, home values, and household income, the backdrop every conforming loan here is sized against.
Citywide figures provide general market context, not an appraisal or an income calculation. Higher values mean a larger down payment in dollars and a larger insurance premium; lower values mean a payment that leaves more room under the ratio ceiling. The percentages do not move; what they amount to does.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Bay City neighborhoods, distinct conventional files.
The house and its use decide the file as much as the borrower. These Bay City submarkets differ in the property types, the occupancies, and the prices a typical buyer carries, which is what the cards below describe.
Condominiums and townhomes
Townhomes in Bay City finance like houses when they are fee simple and like condominiums when they are organized as one; the lender settles which before the appraisal, and the leverage follows the occupancy either way. About 30% of Bay City’s households rent — roughly 4,392 renter households on the latest Census estimate.
Higher-value homes
On Bay City’s higher-value homes, a conventional loan hits the conforming limit first. Buyers over it can bring a larger down payment to fit under it, use the high-balance range where the county has one, or choose the jumbo program. A loan officer confirms the current limit before the offer. Bay City is home to about 32K people.
Newer infill and recent construction
On recent construction in Bay City the appraisal is usually uneventful and the arithmetic decides: whether the loan fits under the conforming limit, and whether the ratio carries the price once the insurance is added at the leverage chosen. On a one-unit principal residence at Bay City’s median value, the first-time buyer’s minimum down payment comes to about $2,900 and the standard minimum to about $4,900 — before closing costs, and before the mortgage insurance that comes with either; a second home, a multi-unit home, or a rental starts higher, as the leverage table shows.
Investor and second-home purchases
Bay City rentals and pied-à-terre purchases run on conventional loans because FHA and VA finance principal residences only. Conventional terms include investment and second-home leverage in the snapshot, reserves for each financed property, and adjustments for the occupancy. Median household income in Bay City sits near $49,420 on the latest Census estimate.
Established close-in neighborhoods
An older Bay City house is a routine conventional purchase; the appraisal is lighter on condition than a government appraisal, which is one reason buyers of older homes often choose this program. The value against the contract price is the usual question. The median owner-occupied home value in Bay City runs near $97,600 on the latest Census estimate.
Two-to-four-unit homes
Bay City duplexes and small apartment houses are conventional purchases at the multi-unit leverage in the snapshot when the buyer occupies one unit, with rent from the other units counted toward qualifying under the agencies’ rules. Roughly 10,285 Bay City households own their homes on the latest Census estimate — 70% of all households, the pool a conventional purchase joins.
Each Bay City submarket has its own property story, and the appraisal and the project review are where that story is told. The leverage limits, the cancellation rules, and the automated finding are the constants.
Four ways Bay City buyers put a conforming loan to work.
A good use of a conventional loan is one its shape fits: a decent score, a down payment of any size from the minimum up, an occupancy the agencies allow, and a loan inside the conforming limit. Four common Bay City uses follow.
Buy an investment property
A Bay City investor buying one to four units on a conventional loan puts down what the leverage table shows for investment property, documents agency-allowed rent toward qualifying, and holds reserves the finding requires per financed property. It is an individual agency loan under investment-property rules, not an investor DSCR loan.
Buy with twenty percent down and no insurance
A Bay City buyer with twenty percent down gets the conventional loan’s cleanest form: no mortgage insurance, loan-level adjustments at the best tier the score allows, and a payment of principal, interest, and escrows alone. Second homes and investment property are priced from the same structure.
Buy a second home
Conventional financing is the consumer program that reaches a second home: a Bay City buyer brings the down payment the leverage table shows for that occupancy, qualifies on the full payment of both homes, and shows the reserves the finding requires. The home must be for the owner’s use, not a rental business.
Buy a first home at the first-time-buyer minimum
For a Bay City first purchase, the conventional route pairs the agencies’ lowest down payment with insurance that cancels and, on the monthly structure, no upfront premium; the file is qualified on the score, the ratio, the reserves, and the automated finding, and a family gift may fund the whole down payment.
Estimate the payment on a Bay City price before requesting a quote.
Before you ask for a quote, size the payment yourself: the Bay City price, the down payment, the term, the benchmark rate, the insurance estimate, and the escrows go in, and the thresholds and the ratio ceiling come from the same guideline source as the block above. The result is an estimate, the rate is a published market average, and the insurance figure is an editable estimate inside Fannie Mae’s published range.
Bay City conventional payment estimate
The starting figures are a Bay City price at the first-time buyer’s minimum down payment. Replace them with yours.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a conventional loan quote.
Estimate seeded at the low end of Fannie Mae’s published range (0.58%–1.86% a year); the insurer prices the actual premium on the score and the leverage. Applies only above 80% loan-to-value.
Illustrative starting assumptions: a $150,000 price (the lowest price the example uses, which sits above Bay City’s median owner-occupied home value), the first-time buyer’s minimum down payment, a thirty-year term at the current Freddie Mac benchmark, mortgage insurance at the low end of Fannie Mae’s published range, property taxes and insurance estimated for Michigan (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a conventional loan quote; your rate is set by the lender at lock. The mortgage insurance figure is an editable estimate seeded from Fannie Mae’s published typical range, not a premium quote; the insurer prices the actual premium, and the cancellation month assumes scheduled payments with no extra principal and no change in value. Taxes, insurance and dues are editable estimates; closing costs are not included. Conforming loan limits apply by county. Licensed in sixteen states for consumer mortgages.
Same buyer, three very different closings.
The alternatives put the conventional loan’s cost in perspective: FHA charges a premium every month and an upfront premium at closing, VA charges a one-time fee, conventional charges a premium only until equity arrives. The comparison below is written for a Bay City buyer weighing all three.
Conventional, FHA, or VA.
The program’s strengths are the cancellable insurance, the breadth of occupancies, and a cost structure that rewards a strong score; its weakness is the same structure applied to a weak one. A Bay City buyer with a strong score usually pays less each month here than on FHA.
FHA asks for a small minimum investment that a gift can cover, accepts a forgiving decision score, and charges an upfront premium plus an annual premium that lasts for the term at full leverage. For a Bay City buyer with a modest score it usually wins; for a strong score the conventional premium is smaller and temporary. See Lendmire’s FHA loan program.
For an eligible veteran, service member, or surviving spouse, the VA loan drops the down payment and monthly insurance for a one-time funding fee that many disabled veterans do not pay. Where eligible, it usually beats conventional for a Bay City principal residence; conventional still wins the second home and rental. See Lendmire’s VA loan program.
The decision is rarely close once the profile is known. Conventional tends to win for a strong score and for every non-primary occupancy, FHA for a modest score, and VA for nearly any eligible principal residence. The comparison is run on the actual numbers, in writing. Above the conforming limit, see the jumbo loan program.
What to prepare for a Bay City scenario review.
What a lender reads on a Bay City conventional loan, and what you can have ready before anyone asks.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the automated underwriting finding, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
The percentages tell only part of the story. What a Bay City conventional loan actually becomes depends on the score, the appraisal, the project review, and the automated finding, and these are the details that move it.
Use these checks to keep the Bay City file clean and fundable.
Three things to settle before a Bay City review: how the mortgage insurance will be structured and when it ends, where the decision score lands and what it prices, and whether the property has any agency question attached.
- Plan the insurance: the premium is priced on the score and the leverage inside the published range.
- Confirm the score: the lender’s report sets the decision score; multiple borrowers use the average of the median scores.
- Know the seasoning: each credit event has its own waiting period counted from a specific date.
Mortgage insurance: how much, and until when
The premium on a Bay City loan can be paid monthly, paid by the lender in exchange for a different price, paid as a single premium at closing, or split. The monthly structure cancels under the federal rules, and the others are set by the lender. The calculator shows the monthly structure and the month the thresholds arrive on scheduled payments.
The score sets the cost
The score does two jobs on a Bay City file: it feeds the automated assessment alongside the rest of the credit file, and it sets the cost of the loan and the insurance. A buyer close to a cost tier sometimes gains more from a short wait and a paid-down balance than from any other change.
Waiting periods after a credit event
A documented hardship beyond the borrower’s control, such as a job loss or a medical event, can shorten several of the waiting periods, and the shortened foreclosure period limits the leverage and the occupancy. A Bay City file inside a waiting period is written later, not now.
Occupancy and its leverage
Each occupancy has its own leverage limit and loan-level adjustments: a principal residence occupied within sixty days of closing reaches the top of the table, a second home is lower, an investment property lower still. A Bay City buyer who states one occupancy and uses another has misrepresented the loan.
Second homes, rentals, and financed-property limits
A Bay City household can hold several conventional loans at once, but each financed property adds reserves to the next file and the agencies cap the number of financed properties a borrower may have. Second homes and rentals are leveraged lower than a principal residence and priced for the occupancy.
From a Bay City pre-approval to keys in hand.
A conventional purchase runs in a fixed order: pre-approval through the automated system on the score, the ratio, and the reserves; contract and appraisal or value acceptance; underwriting that verifies what the finding assumed; and closing with the insurance structure set. Here is that order for a Bay City buyer.
Pre-approval
Start with the score, the income, the down payment, and the occupancy. A Lendmire loan officer runs the automated system, confirms the leverage and the insurance for the down payment chosen, checks the loan against the conforming limit, compares the structure with FHA and VA on the same numbers, and provides the terms in writing.
Contract and appraisal
With the contract signed, the lender orders the appraisal, or accepts the value the automated system offers where a waiver applies. Seller contributions are checked against the cap for the leverage, and a condominium’s project documents are collected for review before the file moves on.
Underwriting
The underwriter verifies what the automated finding assumed: income, assets and reserves, credit and any seasoning, occupancy, and the property. A manual file follows the lower ratio pair instead. Conditions are issued, documented, and cleared before final approval.
Closing
At closing the loan funds at the chosen leverage, mortgage insurance starts with the first payment if the loan is above the threshold, and escrows for taxes and insurance are set up. A Bay City buyer signs the note and security instrument, occupies the home within the occupancy window, and the agency buys the loan.
A brokerage that prices the whole market.
Lendmire never lends. It reads a Bay City file against conventional, FHA, and VA, matches the program to the profile, and keeps the premium, the cost tier, and the conforming limit in front of the buyer before anything is signed.
Several programs, one set of numbers
A lender with one rate sheet sells that sheet; a brokerage with several can say which fits. For a Bay City buyer with a strong score that is usually a conventional loan on the program whose cost is lowest for that file; for a modest score it may be FHA, and the arithmetic decides.
The insurance explained before the offer
The premium and its exit are decided by the leverage and the score, and a buyer should know both before signing a contract. Lendmire states the structure for the Bay City purchase, shows the payment before and after cancellation, and explains the request and automatic thresholds.
Licensed, consumer-purpose, in writing
Lendmire carries the license for the state the Bay City home is in, delivers the disclosures a consumer mortgage requires, and commits the terms to paper. The program figures on this page are read from one guideline source built on the agencies’ published guides.
Trusted by buyers & families alike.
Bay City conventional loan FAQs
Plain answers to the questions Bay City buyers ask most about conventional loans, in the order they usually ask them.
What is a conventional loan, and who is it for?
The general-purpose mortgage: conforming to the agencies’ guides, priced on the credit score, insured privately only while the leverage is above the threshold. It is the program most Bay City buyers compare first and, of the three compared here, the one that reaches a second home or an investment property.
How much do I need to put down on a conventional loan in Bay City?
Less than most people expect on a principal residence, and it can be a gift from family. The trade for a small down payment is mortgage insurance, which cancels as the balance falls; the calculator shows the Bay City payment with it and without it.
What credit score do I need for a conventional loan?
The floor in the snapshot opens the program; the score above it sets the cost. With more than one borrower the automated system uses the average of the median scores, and a Bay City buyer close to a cost tier may gain from a short wait and a paid-down balance.
How does private mortgage insurance work, and when does it end?
Above the threshold the insurance is part of the Bay City payment; below it, there is none. Fannie Mae publishes the typical annual range shown in the snapshot, the insurer prices the actual premium, and the federal cancellation rules end it as equity arrives.
What is the conforming loan limit in Bay City?
Ask a loan officer for the county’s current limit; it changes yearly and by unit count. Above it, a Bay City purchase is still possible with a larger down payment on a conforming loan or on a jumbo loan.
What does the appraisal check on a conventional loan?
Value first: the loan is sized on the lesser of the price and the appraised value. Condition second: there is no HUD or VA property standard, but the home must be safe, sound, and marketable, and findings on older homes are settled before closing. Where the automated system offers value acceptance or an appraisal waiver, no appraisal is ordered at all.
How does a conventional refinance work?
Conventional refinances come in two shapes, each with its own leverage in the snapshot. The appraisal, or value acceptance where the system offers it, sets the value; the score prices the loan; and the occupancy sets the limit.
Can the down payment be a gift?
Yes, on a principal residence, from a relative or other acceptable donor, documented by letter and transfer. The seller cannot be the source, and on second homes and multi-unit homes above the threshold the buyer contributes a share of their own funds.
What are HomeReady, Home Possible, and HomeOne?
Agency programs that open the top conventional leverage to buyers who meet their conditions: HomeReady from Fannie Mae and Home Possible from Freddie Mac for borrowers with income at or below the area-median threshold in the snapshot, with reduced insurance coverage and a homeownership course; HomeOne from Freddie Mac for first-time buyers with no income limit. Each is a conventional loan with its own rules on top.
Can the seller pay my closing costs on a conventional loan?
Yes, up to a cap set by the combined loan-to-value, shown in the snapshot table: the cap falls as the leverage rises, and investment property carries its own lower cap. Contributions above the cap are treated as a price reduction for sizing the loan. The down payment itself cannot come from the seller.
The Bay City conforming file, priced across the market and explained plainly.
Ask for a Bay City scenario review to confirm the leverage, the insurance and its exit, and the loan the program supports. Lendmire is a broker licensed in sixteen states for consumer mortgages and is never the lender.
This guide covers Bay City — for the statewide guidelines, markets, and scenarios, see Conventional Loans in Michigan, part of Lendmire’s conventional loan program.
Nearby markets in Michigan: Saginaw · Midland · Flint · East Lansing · Lansing · Pontiac · Rochester Hills · Troy
Related programs: FHA Loans · Jumbo Loans · Refinance Loans