Conventional Home Loans in Clackamas County, Oregon

The short answer: Conventional home loans in Oregon are mortgages no government agency insures. They follow Fannie Mae and Freddie Mac rules. In Clackamas County the 2026 limit is $832,750 for a one-unit home. Qualified first-time buyers may put 3 percent down on a primary residence. The mortgage insurance comes off as you build equity, which FHA's usually does not.

What Conventional Home Loans in Oregon Actually Are

A conventional loan is any mortgage that is not backed by FHA, VA, or USDA. The lender carries the risk, and most of these loans are sold to Fannie Mae or Freddie Mac. Those two companies write the rulebook. That is why I cite the Fannie Mae Selling Guide on this page instead of a marketing sheet.

Conventional home loans in Oregon come in two sizes. A conforming loan fits under the county loan limit and follows Fannie and Freddie rules. A loan above that limit is a jumbo, and jumbo lenders set their own terms. This page covers the conforming side. For the larger loans common in Lake Oswego and West Linn, start with my Clackamas County jumbo loan checklist.

One term before going further. Loan-to-value, or LTV, is your loan amount divided by the home's value. Put 5 percent down and your LTV is 95 percent. Most conventional rules are written in LTV, so it helps to think in both numbers.

The 2026 Conventional Loan Limit in Clackamas County

Here are the two limits that matter for a one-unit home in Clackamas County this year.

The conforming figure sits at the national baseline. The Portland metro gets no high-cost adjustment, so Clackamas shares the same number as most of the country. The FHA figure is calculated from the local median home price. It lands $131,250 lower.

That gap is where conventional quietly wins a lot of Clackamas files. Say you need a $750,000 loan in West Linn. You are over the FHA limit and still inside conforming. My jumbo checklist shows both figures with links to FHFA and HUD.

Both numbers are for a one-unit property. Duplexes and larger buildings carry different limits. I quote those from the current table on your file rather than from memory.

Down Payment Rules for Conventional Home Loans in Oregon

Conventional does not require 20 percent down. That is the most common misunderstanding I hear. Twenty percent is the point where mortgage insurance is not needed at all. It is not the entry fee.

The 3 percent tier is real, and it has conditions. Under Fannie Mae's Selling Guide, a purchase above 95 percent LTV, up to 97 percent, must meet all of these:

• A one-unit primary residence. Every borrower has to live in it, unless the file includes a Community Seconds loan, which is a type of assistance second mortgage.
• A fixed rate, up to 30 years. Adjustable-rate loans and high-balance loans are not allowed at this tier.
• At least one first-time buyer. Fannie counts you as one if you have not held an ownership interest in a property in the last three years.
• Homeownership education when every borrower on the loan is a first-time buyer.

If nobody on the file is a first-time buyer, there is a second route. Fannie Mae's HomeReady program also reaches 97 percent LTV, and it does not carry the first-time buyer rule. It has an income ceiling instead. Your qualifying income cannot exceed 80 percent of the area median income for the property's location. The same fixed-rate, one-unit, owner-occupied limits apply at that tier. Freddie Mac runs a similar program called Home Possible.

Above that, conventional down payments run in tiers, and each has its own page here: 3 percent, 5 percent, 10 percent, 15 percent, and 20 percent down. My 3, 5, 10, and 20 percent comparison lays them side by side. Every tier is subject to credit approval and a full loan estimate.

Primary Home, Second Home, or Rental in Clackamas County

FHA lends only on a home you will live in. Conventional reaches three occupancy types, and that is one of its clearest advantages.

Primary residence. The home you live in. This is where the 3 percent tier and HomeReady apply.

Second home. Fannie Mae's rules here are specific. The home must be one unit and suitable for year-round use. You have to occupy it for some part of the year and keep exclusive control of it. It cannot be a rental or a timeshare. No management company can control who stays there.

So a cabin near Welches or Government Camp can fit. A cabin handed to a rental manager who runs the booking calendar does not. That one gets underwritten as an investment property. Renting it now and then does not automatically disqualify a second home, as long as that rental income is not used to qualify. My guide to short-term rental rules in Clackamas County covers the county side.

Investment property. A home you own but do not live in. Pricing adjustments apply and the down payment is larger. My DSCR versus conventional investment loan guide covers the rental side in full.

Occupancy is something you certify at closing, not a label. Tell me the real plan for the property and I will match the loan to it.

How PMI Comes Off Conventional Home Loans in Oregon

Private mortgage insurance, or PMI, is a monthly charge added when you put down less than 20 percent. It protects the lender, not you. On a conventional loan it is temporary, and federal law sets the exits.

The Homeowners Protection Act covers single-family primary residences with loans closed on or after July 29, 1999. The Consumer Financial Protection Bureau summarizes three exits.

• You can ask at 80 percent. Once your balance reaches 80 percent of the original value, you can request cancellation in writing. You need a good payment history and current payments. You also certify there are no junior liens, such as a home equity line. The servicer can ask for evidence the value has not dropped.
• It ends automatically at 78 percent. The servicer must end PMI on the date your balance is scheduled to reach 78 percent of the original value, if you are current.
• It ends at the midpoint regardless. On a 30-year loan, PMI must end the month after you reach year 15, if you are current.

Fannie Mae adds a route that matters in this county, because it uses today's value. If your loan is two to five years old, the LTV must be 75 percent or less. After five years, it must be 80 percent or less. The servicer orders a valuation with an interior and exterior inspection.

Improvements that raise the value can waive the two-year wait, at 80 percent. Think a kitchen remodel or added square footage. Routine repairs do not count. That route applies to loans Fannie Mae owns. If Freddie Mac owns yours, its own rules apply, and your servicer can tell you which one holds it.

Owners in Oak Grove, Gladstone, and Oregon City who bought a few years ago may be closer to that line than their statement suggests. Often you can drop PMI without refinancing at all. If a new loan would also improve your terms, my remove PMI refinance guide covers that path.

Where Conventional Beats FHA in Clackamas County

I am not going to rerun the full comparison here. My FHA versus conventional guide for Clackamas County does that. My five-year cost comparison puts numbers on it. Here are the four places conventional pulls ahead most often.

• The insurance ends. Under HUD Mortgagee Letter 2023-05, FHA's annual premium lasts the full mortgage term when you put down less than 10 percent. With 10 percent or more down, it lasts 11 years. Conventional PMI comes off on the schedule above.
• The loan can be bigger. $832,750 against $701,500 for a one-unit Clackamas County home.
• It reaches second homes and rentals. FHA is owner-occupied only.
• Renovation without FHA insurance. Fannie Mae's HomeStyle is the conventional renovation loan. My page on renovation loans in Clackamas County sets it next to the FHA 203(k).

FHA still wins for some buyers, and I will tell you when it does. My page on FHA home loans in Clackamas County covers that side. The point is to price both before you choose.

Conventional Condo Loans in Clackamas County Changed in 2026

If you are shopping condos, this one matters, and very few people are talking about it yet.

A conventional lender reviews the whole condo project, not just your unit. For years a lighter option called Limited Review covered many attached units in established buildings. Fannie Mae retired Limited Review for applications dated on or after August 3, 2026. Freddie Mac retired its version, Streamlined Review, on the same date.

Now an attached unit in an established project needs one of three things. That is a Full Review, FHA project approval through HUD's own review process, or a review by Fannie Mae itself through its PERS service. A Full Review looks at the association's budget, reserves, delinquent dues, insurance, and any litigation.

Some property types skip project review, with a few basic requirements still applying. Fannie waives it for detached condo units, units in two- to four-unit projects, and most units in a PUD. A PUD, or planned unit development, is a community where you own the lot under your home. Many townhome communities are set up that way, and many condo buildings are not. Ask which one you are buying before you write the offer.

If you are looking at an attached condo in Sunnyside or Lake Oswego, ask for the association's condo questionnaire early. The project review is the step that stalls condo files, not your own approval. My Lake Oswego home loans page covers that market.

How to Start a Conventional Loan in Clackamas County

1. Tell me the occupancy plan. Why it matters: a primary home, a second home, and a rental are three different loans with three different down payments.
2. Answer the first-time buyer and income questions. Why it matters: they decide whether the 3 percent tier is open, through the standard route or through HomeReady.
3. Size the loan against $832,750. Why it matters: above it you are in jumbo territory with different rules. Near $701,500, FHA and conventional are both worth pricing.
4. Price conventional and FHA side by side. Why it matters: the year-one payment is only part of the cost, and when the insurance ends matters too. Start with how much house you can afford in Oregon.
5. Get condo documents early. Why it matters: the 2026 review change moved many attached units into a Full Review.
6. Plan the PMI exit at closing. Why it matters: the date your balance is scheduled to reach 80 percent is on your amortization schedule. Put it on your calendar.

I am a solo broker and I answer my own phone. As a broker I can also look across more than one investor's version of these rules. My page on working with a mortgage broker in Clackamas County explains what that changes.

Frequently Asked Questions About Conventional Home Loans in Oregon

What is the conventional loan limit in Clackamas County for 2026?

$832,750 for a one-unit property. That is the national baseline conforming limit, because the Portland metro does not receive a high-cost adjustment. The 2026 FHA limit in Clackamas County is lower, at $701,500 for a one-unit property. A loan above the conforming limit is a jumbo loan, which follows the lender's own guidelines rather than Fannie Mae's or Freddie Mac's. Limits for two- to four-unit properties are different, so confirm them against the current table before you shop.

Can I buy a home in Oregon with 3 percent down on a conventional loan?

You may qualify, and there are two routes. Under Fannie Mae's standard rules, a purchase at up to 97 percent loan-to-value must be a fixed-rate loan of up to 30 years on a one-unit primary residence, and at least one borrower must be a first-time homebuyer, meaning no ownership interest in a property in the last three years. Fannie Mae's HomeReady program also reaches 97 percent without the first-time buyer requirement, but qualifying income cannot exceed 80 percent of the area median income for the property's location. Both are subject to credit approval and a full loan estimate.

When does PMI come off a conventional loan?

Under the Homeowners Protection Act, on a single-family primary residence closed on or after July 29, 1999, you can request cancellation in writing once your balance reaches 80 percent of the original value, with a good payment history and no junior liens. The servicer must end it automatically when the balance is scheduled to reach 78 percent, and at the midpoint of the loan term regardless, as long as you are current. For loans Fannie Mae owns, you can also request removal based on today's value: 75 percent LTV or less if the loan is two to five years old, or 80 percent or less after five years.

Is a conventional loan better than FHA in Clackamas County?

It depends on your down payment, the loan size, the property, and how long you plan to stay. Conventional pulls ahead when you want mortgage insurance that ends, since FHA's annual premium lasts the full term with less than 10 percent down and 11 years with 10 percent or more. It also wins when the loan is above FHA's $701,500 Clackamas County limit or the home is a second home or rental. FHA still fits some buyers well. Pricing both on the same home, subject to a full loan estimate, is the only honest way to decide.

Can I use a conventional loan for a second home or rental in Clackamas County?

Yes, and that is one of the main differences from FHA, which is owner-occupied only. Under Fannie Mae's rules a second home must be a one-unit home suitable for year-round use, occupied by you for part of the year, and under your exclusive control. It cannot be a rental or timeshare, and no management company can control its occupancy. A mountain cabin placed with a rental manager is usually financed as an investment property instead. Investment properties carry pricing adjustments and a larger down payment, subject to credit approval and a full loan estimate.

Does a conventional loan work for a condo in Clackamas County?

Often yes, but the project has to be reviewed as well as you. Fannie Mae retired its Limited Review option, and Freddie Mac its Streamlined Review, for applications dated on or after August 3, 2026. An attached unit in an established project now needs a Full Review, FHA project approval through HUD's review process, or a review by Fannie Mae through its PERS service. Detached condo units, units in two- to four-unit projects, and most PUD units skip project review, apart from a few basic requirements. Ask for the association's condo questionnaire before you write an offer.