These loans include Fannie Mae,
Freddie Mac, and all other mortgages from banks, credit unions, and mortgage
companies, including jumbo loans -- for the most expensive homes with balances
above conforming limits, currently at $484,350. Sub-prime mortgages, for B-,
C-, and D-credit borrowers are also conventional loans, although they often
appear to be anything but conventional. Conventional mortgages do not include
those made or guaranteed by the FHA (Federal Housing Administration), the VA
(Veterans Administration), or the U.S. Department of Agriculture.
***5%***A five percent down
payment is the typical down payment required on a conventional financed loan,
but in some cases the down payment can be as loan as three percent.
Conforming Conventional Loan
In the United States,
a conforming loan is a mortgage loan that conforms
to GSE (Fannie Mae and Freddie Mac) guidelines. The
most well-known guideline is the size of the loan, which as of 2019 was
generally limited to $484,350 for single family homes in the continental
US. Other guidelines include borrower's loan-to-value
ratio (i.e. the size of down payment), debt-to-income
ratio, credit score and history, documentation requirements, etc.
general, any loan which does not meet guidelines is a non-conforming loan.
A loan which does not meet guidelines specifically because the loan amount
exceeds the guideline limits is known as a jumbo loan.