Do I need reserves for a conventional loan?
Often yes. Standard conventional usually wants 1-6 months of housing-payment reserves depending on credit, DTI, and property type. Multi-financed-property borrowers and investment-property files require more (often 6 months on the subject property + reserves on each additional financed property).
What this actually means.
Reserves are liquid funds remaining after closing — measured in months of full housing payment (PITI). Primary residence with strong credit and standard DTI often needs 0-2 months. As DTI climbs or credit weakens, reserves go up. Investment property generally requires 6 months on the subject; second homes typically 2 months. Reserves can come from checking, savings, retirement (vested portion at a discount), or stocks. Subject to Fannie/Freddie guidelines and lender overlays.
Where this can move.
Gift source, seller credit limits, DPA program rules, source-of-funds documentation, and program eligibility (HomeReady, Home Possible) can change the answer.
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More conventional questions on Down Payment.
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.