Agency

A conventional mortgage loan is a type of home loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Instead, conventional mortgages are originated and serviced by private lenders, such as banks, credit unions, and mortgage companies.

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Conventional mortgages typically require a down payment of at least 5% of the home's purchase price, although some lenders may require a larger down payment. Borrowers with higher credit scores may be able to qualify for lower interest rates and more favorable loan terms.

Overview

Conventional mortgages are a type of home loan that is not guaranteed or insured by a government agency such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the United States Department of Agriculture (USDA). Instead, conventional mortgages are offered and backed by private lenders such as banks, credit unions, or mortgage companies.

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One of the defining characteristics of conventional mortgages is that they typically require a higher down payment compared to government-backed loans. In most cases, borrowers will need to put down at least 5% of the home's purchase price. However, some lenders may require a larger down payment depending on factors such as the borrower's credit score, debt-to-income ratio, and the loan amount.

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Another key feature of conventional mortgages is that they have stricter qualification requirements compared to government-backed loans. Lenders will typically look at a borrower's credit score, income, employment history, and other factors to determine whether they are eligible for a conventional loan. Borrowers with higher credit scores and more stable financial histories are more likely to qualify for a conventional loan and may also be offered more favorable terms such as a lower interest rate.

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Conventional mortgages are available in both fixed-rate and adjustable-rate options. A fixed-rate mortgage offers a stable interest rate that does not change throughout the life of the loan, while an adjustable-rate mortgage may have a lower initial interest rate that can adjust up or down over time depending on market conditions.

Programs

Agency

Buydown

Any and all borrowers who are looking to purchase a home but may not have the funds to pay the full amount of a loan's interest rate can benefit from a Buydown loan. The Buydown loan is designed to make smaller payments over a shorter period of time, while still enjoying a lower interest rate.
Feature Summary
2% below the note rate for year 1
1% below the note rate for year 2
Fully indexes on year 3

Conforming Standard

Whether you are looking to purchase a primary, secondary or investment property, Conforming loans are a great option for borrowers looking to avoid high interest rates
Feature Summary
Loan amounts up to $726,200
15, 20, 25, & 30-year fixed rate
Down payments as low as 3% depending on a loan amount

High Balance FNMA

With loan amounts up to $2,095,200 and down payments as low as 5%, Fannie Mae High-Balance Conforming loans can help borrowers to purchase properties located in high-cost areas
Feature Summary
Minimum 620 FICO score
Down payment starting at 5%
Loan amounts up to $1,089,300 for a single unit in high-cost areas

Home Possible - FHLMC

Freddie Mac's Home Possible loan offers affordable solutions to lower income borrowers with down payment requirements as little as 3%, and no geographic limits on loan amounts
Feature Summary
Low down payment with a maximum of 97% LTV, 105% TLTV with Affordable Seconds®, and 97% HTLTV for 1-unit properties
Mortgage insurance (MI) on 1-unit properties can be cancelled after loan balance drops below 80% of the home's appraised value and cancellation criteria are met. MI coverage requirements are reduced for LTV ratios above 90%
Credit fees are capped and less than standard fees for all loans over 80% LTV

HomeReady - FNMA

The high LTV ratios, low down payment requirements and overall flexibility offered from Fannie Mae’s HomeReady loan gives first time and repeat buyers/investors the opportunity to acquire the property you are looking for.
Feature Summary
Minimum of 620 FICO
Up to 97% loan-to-value (LTV) financing and flexible sources of funds
Low down payment, starting at 3% for home purchases

HomeStyle Renovation

Whether you are in need of renovating and rehabbing a new or existing home, Fannie Mae's HomeStyle Renovation offers you the ability to with zero income limitations
Feature Summary
Provides financing for property improvements, renovations and repairs up to 75% of the as-complete appraised value of the property
Loans delivered before project starts (subject to lender approval)
Not limited to existing Fannie Mae loans, except for loans with LTV ratios greater than 95%

MH Fannie Mae

Fannie Mae’s manufactured housing provides a simple solution for borrowers ready to purchase affordable homes
Feature Summary
MH Advantage is a new homeownership option that offers innovative and affordable financing on specially designated MH homes that feature site-built characteristics
Qualifying borrowers can finance up to 97% LTV. When combined with HomeReady® mortgage, borrowers can fund their down payment through multiple sources and save more through reduced MI coverage
Diverse selection of aesthetic features and layouts gives families an opportunity to live in a home that matches their style

MH Freddie Mac

Take advantage of the high quality, affordable path to homeownership with Freddie Macs manufactured housing
Feature Summary
Eligible mortgage products: Fixed-rate, 7/6-Month ARMs, and 10/6-Month ARMs, HomePossible Mortgage may be secured by MH (subject to conditions)
Maximum 95% LTV
For a purchase or "no cash-out" refinance the maximum loan term is 30 years

Refi Possible - FHLMC

The flexibility and variety offered from Freddie Mac Refi Possible provides borrowers who may not qualify for a traditional refinance due to their income, with the best possible options to refinance their current mortgage
Feature Summary
Borrower income: Less than or equal to 100% area median income (AMI)
DTI up to 65% for LPA and manually underwritten mortgages
Cash out limited to $250

RefiNow - FNMA

The Fannie Mae RefiNow can help lower income borrowers with a conventional mortgage to decrease monthly payments and help make homeownership more sustainable.
Feature Summary
Available to borrowers at or below 100% of the area median income
DTI up to 65%
No minimum credit score required

Super Conforming

The larger loan amounts, competitive interest rates and terms offered from Freddie Mac's Super Conforming loan is what make it such a great option for borrowers who are looking to purchase either a primary residence, second home, or investment property
Feature Summary
Min. 620 FICO score
Maximum DTI 45% for Manually Underwritten Mortgages
Loan amounts up to $1,089,300 for a single unit in high-cost areas