The days of zero-down-payment loans and no-income-verification loans are long gone — consumers applying for a conventional mortgage now need three basic elements to qualify: cash, good credit and income.

“Each lender has their own requirements, so conventional mortgage requirements vary significantly,” says Sarah Pichardo, a senior loan officer with George Mason Mortgage in Fairfax, Va.

While it is possible to get a conventional loan with a credit score as low as 620, the interest rate will be higher because of the added risk of the low credit score, Pichardo says.

She says that the borrower will need to make a down payment of at least 20 percent since he or she cannot qualify for mortgage insurance with a credit score of 620.

Most mortgage insurance companies, says Pichardo, require a credit score of 700 or higher, while others require a credit score of 660 or higher.

Conventional mortgage loans usually require a minimum down payment of 5 percent, with 10 percent required on condominium purchases. Borrowers who need to finance more than the conforming loan amount of $417,000 will need a higher credit score of 700 or above and a larger down payment, Pichardo says.

Cash and document trail

Conventional loan programs usually require the borrower to have at least three months’ of cash reserves after closing. Pichardo says lenders can require as much as 12 months’ cash reserves depending on the loan size, amount of down payment and borrower’s credit score.

Borrowers also need to prove their income and assets with current pay stubs, W-2 forms, bank statements and job histories. Self-employed borrowers will need to provide two years of tax returns.

Pichardo says loan program requirements for overall debt-to-income ratios vary from 45 percent to 55 percent.

For those who qualify, a conventional mortgage typically offers the lowest costs and best interest rates for home financing.