Conventional Loan

A conventional mortgage refers to a loan that is not insured or guaranteed by the federal government.

A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate. The maximum limit for a conforming loan depends on the county and state you live in and can be found here:

2015 Conforming Loan Limits

There were 46 Counties nationally that saw an increase in conforming limits for 2015, with maximum loan limits increasing for certain counties in California, Colorado, Massachussetts, Maryland, Tennessee, New Hampshire, and Washington. Find the full list of the counties affected by the 2015 loan limit increases here:

2015 Counties with Limit Increases

Low Down Payment

The minimum down payment for a home purchase is 3% of the sales price. Previously, the minimum down payment for conventional loans was 5%, however it was announced December 8, 2014 that both Fannie Mae and Freddie Mac will allow for a 3% down payment. This will allow for borrowers with limited down payment funds potential access to both conventional and FHA options for purchasing a home.

620 Minimum FICO Score

Compare that to many other lenders that require a 660 FICO score. Because of this, we can get more people qualified.

No Upfront MIP

Unlike FHA, a conventional loan does not charge you upfront mortgage insurance and if you borrow over 80% of your value, your mortgage insurance can be removed once your balance gets down to 78% loan to value.

All Occupancy Types

Conventional financing can be used for primary residences, second homes, and investment properties.

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Conventional loans are ideal for borrowers with good credit and either have equity or can put down a minimum of 3% on a purchase.

If you’ve had past credit issues such as bankruptcy or a foreclosure, the minimum waiting periods to qualify for a conventional loan are listed below. In certain cases, if there was an extenuating circumstance which caused the derogatory event (illness, loss of income, etc.) the waiting periods have been shortened. For reference, Short sales fall under “pre-foreclosures”.

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