Conventional conforming loans are loans of $424,100 or less that are purchased by FNMA(Federal National Mortgage Association or Fannie Mae) or FHLMC(Federal Home Loan Mortgage Corporation or Freddie Mac)
These loans require as little as 5% down, but many people think they have to put 20% down. Putting 20% down does avoid the cost of mortgage insurance, however mortgage insurance allows people to get into homes sooner and the mortgage insurance automatically stops when the loan to value reaches 78%(when the amount you owe divided by the original appraised value <= 78%)
FNMA Home Ready and FHLMC Home Possible - 3% Down Programs
These are the conventional loans that only require 3% down and often offer a slightly lower interest rate as well as lower mortgage insurance requirements. This program is similar to an FHA program so it is best to consult your mortgage professional to decide which program is best for your particular situation. These programs do have income limits based on the location of the property as well.