Conventional mortgages offer financing options for homebuyers with a stable employment status and a strong credit history.



Flexible Financing Options Your Way with Conventional Mortgages

What is a Conventional Financing?

Conventional loans are one of the most common types of mortgages and can be classified as a conforming or non-conforming loan. A conforming loan follows the guidelines and limits of government sponsored enterprises (GSEs) such as Fannie Mae or Freddie Mac. A non-conforming loan exceeds the maximum loan limits established by these enterprises.

The conforming loan limits are set and evaluated on an annual basis by GSEs.

How a Conventional Mortgage works:

There are two types of conventional loans: insured or uninsured. If a person’s down payment is less than 20%, Private Mortgage Insurance (PMI) is required. PMI protects mortgage lenders against financial losses if a borrower defaults and stops paying their loan. PMI rates vary and depend on a borrower’s loan-to-value ratio and credit score.

Typically, a 5% down payment from the borrower’s own funds is required. After this initial 5%, the remaining down payment funds may be gifted from an allowable source. If gift funds meet or exceed 20%, there is no required minimum buyer contribution.

To find out if you qualify for a conventional mortgage, contact your Loan Originator!

Key Features and Highlights Conventional Mortgage program:

  • Available for first-time or repeat homebuyers
  • Down payment amount typically ranges from 3-20%
  • Allowable seller contributions depend upon down payment amount and occupancy
  • Available for 1-4 units, townhouses, approved condominiums, or Planned Unit Developments (PUDs) for owner-occupants or investors
  • Co-signers are allowed to help buyers qualify for single family residences
  • Available for purchase or refinance

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