Conventional Loans
What is a Conventional Loan?
A Conventional loan is a loan that is not backed by a federal agency, but instead backed by private lenders such as Fannie Mae or Freddie Mac. Typically, conventional loans may require more from the borrower than an FHA LOAN.
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What are the requirements for a Conventional Loan?
Primary residence or investment- 3% Down (first-time homebuyer only)
- Minimum 620 credit score
- NO Mortgage Insurance if more than 20% down
- Down payment can be a gift
- Seller allowed to contribute towards closing costs
What types of conventional loans are there?
Conforming
A conforming loan is a loan that adheres to the loan limits set by Fannie and Freddie.
Conventional (Conforming)
- $647,200 IN MOST COUNTIES
- Most common loan type.
- Loan amount must be $647,200, or less in most counties and may be as high as $970,800 in high-cost counties.
- If your down payment is less than 20%, you’ll typically need mortgage insurance.
- Credit score of 620
Non-Conforming
A non-conforming loan is a loan that falls outside of the conforming loan limits.
Jumbo (Non-Conforming)
UP TO $1-2 MILLION- Credit Score of 640
- Jumbo loan for amounts greater than the Conforming Jumbo limit in your county, up to $1-2 million
(Non-Conforming)
- UP TO $1-2 MILLION
- Credit Score of 640+
- Jumbo loan for amounts greater than the Conforming Jumbo limit in your county, up to $1-2 million
Who is eligible for a conventional loan?
Anyone who meets the necessary criteria for a conventional loan