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).
Plain-English explanation
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.
What can change the answer?
Gift source, seller credit limits, DPA program rules, source-of-funds documentation, and program eligibility (HomeReady, Home Possible) can change the answer.
Want the real answer for your conventional file?
Conventional guidelines are the rule. Your credit, income, DTI, PMI, LLPAs, and Florida payment math are what decide the actual answer.
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.