Conventional Loans
in Dane County
The most common way Wisconsin buyers finance a home. As little as 3% down, no upfront mortgage insurance, and PMI that goes away. Here is exactly how it works on a real Dane County home in 2026.
What is a conventional loan in Madison and Dane County, Wisconsin?
Quick answer: A conventional loan is a mortgage that is not backed by a government agency like FHA, VA, or USDA. In Dane County you can buy with as little as 3% down and a credit score around 620, up to the 2026 conforming limit of $832,750. Private mortgage insurance applies under 20% down but cancels once you reach 20% equity. It is the go-to loan for buyers with solid credit who want flexibility and a lower long-term cost.
· · Serving Madison, Sun Prairie, Middleton, Verona, Waunakee & DeForest
Why most Dane County buyers use conventional
If you have decent credit and steady income, a conventional loan is usually the most flexible and lowest-cost way to buy in Madison and the surrounding communities. Unlike FHA loans, there is no upfront mortgage insurance premium, and the monthly mortgage insurance falls off once you build 20% equity, which happens faster in a market where Dane County values keep climbing.
Conventional loans follow guidelines set by Fannie Mae and Freddie Mac. That standardization is what makes them widely available, competitively priced, and usable on primary homes, second homes, and investment properties across Verona, Sun Prairie, Waunakee, Middleton, and DeForest.
As little as 3% down
Fannie Mae HomeReady and Freddie Mac Home Possible let qualified buyers put down just 3%.
No upfront MI
Unlike FHA, there is no upfront mortgage insurance premium rolled into your loan.
PMI that cancels
Private mortgage insurance drops off at 20% equity, lowering your payment over time.
Flexible uses
Primary residence, second home, or investment property, with 15, 20, or 30-year terms.
What 3% down actually looks like here
The Dane County median sale price was $495,000 in June 2026, up 6.5% from a year earlier (SCWMLS). On that home, here is what different down payments come to in real dollars. Putting down 3% keeps your cash to close low; putting down 20% erases private mortgage insurance entirely.
Down payment on a $495,000 Dane County home
More down means a smaller loan and, at 20%, no PMI. Less down means you keep cash and buy sooner.
Example based on the June 2026 Dane County median sale price of $495,000 (SCWMLS). Your price, rate, and PMI depend on the home and your lender.
The conforming limit matters. For 2026, a one-unit conventional loan is conforming up to $832,750 in Dane County. At the local median price, you are comfortably inside that limit, which keeps your rate and options competitive. Higher-priced homes above the limit move into jumbo territory.
How conventional compares to other loans
Conventional is not the only path, and it is not always the cheapest to get into. If you qualify for a VA or USDA loan, you may be able to buy with nothing down. Here is the minimum down payment by loan type so you can see where conventional fits.
Minimum down payment by loan type
On the same Dane County home, this is the least you could bring to close by program.
VA and USDA have their own eligibility rules. John helps you figure out which program you actually qualify for.
Private mortgage insurance is temporary
The short version
- PMI applies when you put less than 20% down.
- You can request cancellation once you reach 20% equity (80% loan-to-value).
- By law it automatically ends at 78% loan-to-value on the original schedule.
- Rising Dane County home values can get you there faster than the schedule alone.
- Stronger credit generally means a lower PMI cost.
Two ways to reach 20% equity
- Pay it down. Every payment chips away at your balance and builds equity.
- Appreciation. With the Dane County median up 6.5% year over year, your home can build equity on its own.
- A new appraisal. Once values or improvements push you to 20% equity, you can ask your servicer to drop PMI.
The takeaway: a lower down payment gets you into the market sooner, and PMI is a temporary cost, not a permanent one.
Dane County homes sell in a
median of 8 days. Be ready to move.
With about 2.1 months of supply, this is still a seller's market. Getting pre-approved for a conventional loan before you shop is the difference between winning the home and watching it go to someone else.
What lenders look for
Typical requirements
- Credit score around 620 or higher
- Steady, documentable income and employment
- Debt-to-income ratio generally within program limits
- Down payment from 3% up, from savings or eligible gift funds
- Loan amount at or below the $832,750 Dane County conforming limit
Where conventional shines
- Buyers with solid credit who want the lowest long-term cost
- Anyone who wants PMI to eventually disappear
- Second homes and investment properties
- Buyers who want to avoid FHA upfront and lifetime mortgage insurance
- Stronger offers in a competitive Dane County market
Which one is right for you?
There is no universal winner. Conventional usually wins for buyers with credit around 680 and up, because PMI cancels and there is no upfront insurance. FHA can be the better door in if your credit is in the 580 to 640 range or your debt-to-income is a little higher. The right call comes down to your numbers, and comparing them side by side is exactly the kind of thing to sort out before you write an offer.
Lean conventional if
Your credit is strong, you want PMI to fall off, and you would rather skip upfront mortgage insurance.
Lean FHA if
Your credit is still building or your debt-to-income is tight and you need more flexible qualifying.
Not sure?
John and a trusted local lender run both side by side so you can see the real monthly difference.
From pre-approval to keys
Check your credit and budget
Know your score and a comfortable monthly payment before you shop. John can point you to lenders who work well with Dane County buyers.
Get pre-approved
A real pre-approval tells you your price range and makes your offer credible in a fast market.
Find the right home
Tour homes across Madison, Sun Prairie, Middleton, Verona, Waunakee, and DeForest and find the one that fits.
Write a winning offer
With inventory tight, offer strategy matters. John structures your offer to compete without overpaying.
Appraisal and underwriting
The lender confirms value and finalizes your loan. Conventional appraisals are often more flexible than FHA.
Close and get your keys
Sign, fund, and move in. From there, every payment and every bump in value builds toward dropping PMI.
How John helps you use it
Local, hands-on, and lender-agnostic
John Reuter has helped hundreds of Dane County families buy with conventional financing. He is not tied to any single lender, so he can point you to the ones who price well and close on time for buyers like you, then weigh a 3% versus 5% down payment against your budget and your goals. When you find the home, he builds an offer that wins in a low-inventory market across Madison, Sun Prairie, Waunakee, DeForest, Verona, and Middleton, and makes sure your down payment goes as far as it can. New to buying? Start with the First-Time Homebuyer Guide.
Explore other loan programs
FHA Loans
3.5% down and flexible credit. A strong option while your credit is still building.
VA Loans
$0 down and no PMI for eligible veterans, active duty, and spouses.
USDA Loans
$0 down for eligible rural and suburban areas around Dane County.
WHEDA
Wisconsin's own first-time buyer loans plus down payment assistance.
Downpayment Plus
Up to $10,000 in forgivable down payment and closing-cost help.
All Programs
See every buyer loan program side by side and find your fit.
Conventional loan FAQ
What is the minimum down payment for a conventional loan in Wisconsin?
What is the 2026 conforming loan limit in Dane County?
When does PMI come off a conventional loan?
What credit score do I need?
Is a conventional loan better than FHA in Madison?
Can I use a conventional loan for an investment property?
Let's find your home
in Dane County
Whether you are putting down 3% or 20%, the first step is the same: a quick conversation about your budget and a real pre-approval. Then we go win you a home.
Rates, private mortgage insurance costs, qualifying guidelines, and the conforming loan limit are set by lenders, Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency, and change over time. The 2026 one-unit conforming limit is $832,750. Local market figures reflect South Central Wisconsin MLS (SCWMLS) Dane County data as of June 2026 and are examples, not a quote. Confirm current terms with a licensed lender. Integrity Homes helps you compare programs and win the right home; it does not originate loans.