You put five percent down, and the mortgage insurance line on the disclosure made the payment meaningfully higher than the number you had been planning around.
The limit that decides which rulebook you are in
For 2026 the baseline conforming loan limit for a one-unit property is $832,750, announced by the Federal Housing Finance Agency on 25 November 2025. Maricopa County is not a designated high-cost area, so that baseline is the number that applies in Phoenix, Scottsdale and across the East Valley. The multi-unit baselines are $1,066,250 for two units, $1,288,800 for three and $1,601,750 for four.
One dollar over that limit and you are in a different program with different reserve requirements, different ratio ceilings and different pricing. Because Maricopa sits at the baseline rather than in a high-cost tier, there is no intermediate high-balance step here. The cliff is sharp, which means structuring around it is frequently worth real money. More on that on the jumbo page.
Private mortgage insurance ends. Here are the two dates
This is the single most valuable thing to understand about conventional financing, and it is federal law rather than a lender courtesy. Under the Homeowners Protection Act, as the Consumer Financial Protection Bureau describes it, there are two triggers and they work differently.
Borrower-requested cancellation at 80%. You send the servicer a written request. The eligible date is either the date the balance is scheduled to reach 80% of the original value, or the earlier date it reaches 80% based on the payments you actually made. Approval also requires a good payment history, being current, certifying there are no junior liens, and evidence that the value has not fallen below the original value.
Automatic termination at 78%. You do not have to ask. The servicer must terminate on the date the balance is scheduled to reach 78% of original value, provided you are current. Current property value is not a factor, so the servicer may not require you to pay for an appraisal as a condition of automatic termination. And it cannot be accelerated: extra payments do not move this date.
That asymmetry is the whole strategy. Paying extra principal moves the 80% request date closer. It does nothing to the 78% automatic date. So if you intend to pay down aggressively, the written request is how you capture the benefit, and almost nobody sends it.
If neither trigger fires, coverage still cannot be imposed past the first day of the month after the midpoint of the amortization period, which on a 30-year loan is after 15 years. Unearned premiums must be returned within 45 days of cancellation or termination. High-risk loans are carved out of the 80% and 78% rules and fall under the midpoint rule instead.
Why that makes conventional the usual exit from FHA
Put the two programs side by side. Above 90% loan-to-value at origination, FHA's annual mortgage insurance premium runs for the full mortgage term and the only way out is to refinance (HUD Mortgagee Letter 2013-04). Conventional private mortgage insurance terminates by statute, on a schedule you can calculate the day you close.
That is why the standard plan for an FHA buyer is not to keep the FHA loan. It is to use FHA to get in, build to 20% equity, and move to a conventional loan where the insurance has an end date. If nobody has walked you through that timeline, you are holding half the plan.
Low down payment conventional, and the appraisal waiver
Conventional financing reaches as low as 3% down on qualifying files, which surprises people who assume FHA is the only low down payment route. At a 680 or better score the private mortgage insurance at that leverage is frequently cheaper than FHA's annual premium, and it ends. Run both. The comparison is the deliverable.
The automated underwriting may also offer an appraisal waiver, which removes days and a fee from the transaction. Waivers show up most often on homes in large tract subdivisions with deep comparable sales data, and effectively never on unique or custom properties. That is worth knowing when you are choosing between a Gilbert production home and a custom build in Paradise Valley on the same timeline.
When FHA still wins
If your score sits below the mid 600s, or there is recent credit damage, or your ratio needs more room than conventional underwriting allows, FHA will frequently approve a file that conventional declines, and an approval beats a cheaper loan you cannot have.
The honest version is that these two programs are not rivals. They are two tools, and which one is right depends on your credit tier, your leverage and how long you will own the house. Anyone who recommends one before looking at all three is guessing.
What changes by city across the East Valley
The agency rulebook is national. The appraisal, the price point against the conforming limit, and the property type are local.
- Mesa. Older stock means a full appraisal is more likely than a waiver, so build the contract timeline around an appraisal rather than hoping for one to be waived.
- Gilbert. Large tract subdivisions with deep comparable data, which is exactly where appraisal waivers actually happen. When one is offered it shortens the timeline and removes a fee.
- Chandler. The dual-income Price corridor file. How base salary, bonus and equity compensation are documented moves the qualifying number far more than the rate does, and the rules for each of the three differ.
- Tempe. Warrantability. A conventional loan on an attached unit turns on the project review: investor concentration, single-entity ownership, commercial space and whether the budget funds reserves. Check it before the offer.
- Scottsdale. Price points cross from conforming into jumbo within a few miles, so the 2026 limit is the line that decides which rulebook applies to your file.
- Phoenix. Historic districts and unique properties are where appraisal waivers disappear and a deliberate appraisal strategy earns its keep.
- Queen Creek. New construction with long completion windows, which makes a lock strategy, not a rate quote, the thing you actually need.
- Paradise Valley. Almost always above the conforming limit, which puts these purchases under the jumbo rulebook instead.
Common questions
What is the conforming loan limit in Maricopa County for 2026?
$832,750 for a one-unit property. Maricopa is not a high-cost area, so the national baseline applies (Federal Housing Finance Agency, announced 25 November 2025).
When does PMI come off a conventional loan?
Two triggers. You may request cancellation when the balance reaches 80% of original value, and the servicer must terminate automatically at 78% scheduled, if you are current. Coverage also cannot continue past the amortization midpoint.
Does paying extra principal get rid of PMI sooner?
It can move the 80% borrower-request date up, because that date may be based on actual payments. It does not move the 78% automatic termination date, which is based on the scheduled balance.
Can the servicer make me pay for an appraisal to remove PMI?
Not for automatic termination at 78%, where current value is not a factor. For a borrower request at 80% the servicer may require evidence that the value has not declined below the original value.
How little can I put down on a conventional loan?
As little as 3% on qualifying files. At a 680 or better score the mortgage insurance at that leverage is frequently cheaper than FHA's, and unlike FHA above 90% loan-to-value, it ends.
Conventional or FHA?
Credit tier, leverage and how long you will own the home decide it. Above the mid 600s with 5% down, conventional usually costs less over the hold. Below that, or with recent credit damage, FHA frequently approves what conventional will not.
Why bring this file to us
- Broker model. Multiple investors rather than one bank's shelf, which is what a file needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending and a Certified Mortgage Planner, NMLS #173141, originating mortgages since 1999. Direct line: (480) 999-9842.
- We price the alternatives against each other. Most lenders quote the program you asked for. The comparison is the work.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Program rules, agency limits and pricing change, and every file depends on credit approval, property appraisal, income and asset verification and other qualifying factors. Not all applicants will qualify. Figures attributed to an agency above are cited with the issuing agency and the date they were published; confirm the current figure on your own file before you plan around it. Ricky Khamis, NMLS #173141. EPiQ Lending, NMLS #1936984, 7975 N. Hayden Road, Suite A-101, Scottsdale, AZ 85258. Verify any of this at NMLS Consumer Access, the EPiQ Lending profile or the Scottsdale branch page.