What is a conventional loan?
A conventional mortgage loan is a “conforming” loan, which means that it Fannie Mae or Freddie Mac’s requirements are met. Those are government-sponsored enterprises that purchase mortgages from lenders and sell them to investors. This frees up lenders’ funds so they can get more qualified buyers into homes.
One type of common non-conforming mortgage is a jumbo loan, which is a mortgage that exceeds conforming loan limits.
There’s no single set of requirements for borrowers. However, in general, conventional loans have stricter credit requirements than government-backed loans like FHA loans.
Conventional Loan Key points
- How your credit impacts your request
- If you must be a first-time home buyer.
- If you must attend a class on home buying and finances.
- Conventional Loan requirements