A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government and conforms to the loan limits set forth by Freddie Mac and Fannie Mae. Conventional loans may be "conforming" and "non-conforming." Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac.
Conventional Loan Guidelines
Presently, these guidelines put the maximum price for a first mortgage at $647,200 for a single-family dwelling. If the purchase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan.
Some Requirements of Conventional Loans are:
- 5-20% down, gift funds accepted
- Fixed or adjustable rate
- Full documentation of income and assets to close
- Additional underwriting requirements will vary by borrower situation
- No mortgage insurance: mortgage insurance is not required for loans when you put down 20% or more toward the down payment
- May be used for primary residence, second homes and investment property
To learn more about Conventional loans and how to apply, give us a call today at (610)351-0428!