Conventional loans offer home buyers many benefits, including low down payment options, the option to cancel mortgage insurance, and the option to finance multiple property types (e.g., investment, vacation, or primary residences). Explore all conventional loan products and benefits here.

Every conventional loan is a conforming loan, and a conforming loan is a type of conventional loan that conforms to guidelines regulated by the Federal Housing Finance Agency (Fannie Mae and Freddie Mac). Some conventional home loans are non-conforming, meaning that a government agency does not back them. Learn more about conforming vs. conventional loans.

FNMA (Federal National Mortgage Association), more commonly known as Fannie Mae and FHLMC (Federal Home Loan Mortgage Corporation) or Freddie Mac, are federally backed mortgage companies that regulate and purchase conforming conventional loans. Learn more about each organization and the definition of a conventional mortgage loan here.

Yes, down payment assistance in the form of a gift, grant, or second mortgage loan can be used in conjunction with a conventional loan to offset down payment and closing costs. A conventional loan down payment offers home buyers great flexibility on where the money for the mortgage down payment comes from.

Conventional loans typically have tighter guidelines around credit score and debt-to-income ratio requirements when compared to FHA, VA, or USDA home loan programs. You will need to have higher credit scores to qualify for a conventional loan. Read more about the pros and cons of a conventional loan here.

Conventional loans are a great financing option for buyers that meet conventional loan requirements. Once we review your mortgage application, including your credit report, your mortgage lender can help determine if a conventional loan is a good solution for your financial situation.

We do not have a preference when it comes to loan type. The ultimate goal for every Mortgage Loan Originator is to help their client finance their home with a loan product that best suits their financial situation. Once you complete your loan application, your mortgage loan officer or lender will have all the information they need to recommend the best loan products and help you achieve your goal of buying a home.

You can have up to 10 conventional loans at once. However, you must be able to qualify for more than one mortgage at a time. Learn more about having more than one conventional loan here.

No, once there’s 20% equity in the home, private mortgage insurance is no longer necessary with a conventional loan. Learn more about conventional loan private mortgage insurance here.

Yes, if you put less than 20% down on your conventional loan, you may be required to pay private mortgage insurance (PMI), but mortgage insurance can be canceled once there’s 20% equity in the home. Explore PMI removal strategies here.

No, you are not required to complete a home inspection to get a conventional mortgage. However, it is wise to move forward with a home inspection to determine the home's condition before finalizing your purchase, and we explain why here.

Yes, unlike FHA, USDA, and VA loan programs, a conventional loan doesn’t have to be used to purchase a primary residence. You can also use a conventional mortgage to buy a second home or a vacation property. Mortgages for conventional loans provide more options to meet your home buying needs.

Unlike FHA’s 90-day flip rule, conventional loans do not require you to own the home for 90 days. Instead, Fannie Mae and Freddie Mac require an appraisal to confirm the home's market value to ensure that the flipped property will sell at a fair price.

Yes, an escrow waiver can be applied to a conventional loan if you have more than 20% equity in your home. Learn more about escrow waivers here.

Yes, conventional loan limits conform to the guidelines set by Freddie Mac and Fannie Mae. Conforming loan limits determine the max loan amount that a home buyer can finance with a conventional loan in their county. Learn more about conventional loan limits here.

Conventional loan limits are set by the Federal Housing Finance Agency (FHFA) each year in November. The FHFA House Price Index (FHFA HPI ®) measures the average price changes of single-family homes in the US. FHFA uses the data to ensure that the conforming loan limits adjust to accommodate financing a house with a conforming conventional loan in the current real estate climate. Limits are established to help prevent people from getting loans that they can't afford to pay back. Mortgage limits protect both the consumer and lender.

Yes, in fact, the co-borrower doesn’t have to live in the home with the borrower if they are financing with a conventional loan. This type of co-signer is known as a non-occupying co-borrower. The non-occupant co-borrower must be a relative of the home buyer. Learn more about rules for co-borrowers here.

There’s no limit to the amount of acreage that a home sits on with conventional financing. However, the appraiser must confirm that the property is classified as residential and not intended for commercial or business use. Agricultural properties like farms or ranches may require commercial financing. Commercial loans are required for business property.

You will need to wait four years from a dismissed or discharged chapter 7 bankruptcy. The waiting period with chapter 13 bankruptcy is two years from the discharge date or four years from a dismissed bankruptcy.

Conventional mortgages typically require a waiting period of seven years after a foreclosure. However, there are exceptions to this rule under specific circumstances. Learn more about those exceptions and how conventional loans view a past foreclosure here.

Fannie Mae and Freddie Mac require a 4 year waiting period after a short sale unless there’s a documented extenuating circumstance. If there’s an extenuating circumstance, a 2 year waiting period may apply. Learn more about short sale waiting periods here.

Yes, a seller can pay between 3-9% of closing costs on a conventional loan. The percentage amount will depend on the size of the down payment provided by the buyer. Learn more about seller-paid closing costs here.

The short answer is yes, but it can be challenging to flip a property with traditional financing. Learn more about financing a flip with a conventional loan.

Yes, and your options vary depending on the type of new construction home. If you’re hoping to finance a pre-built new construction property, a traditional conventional mortgage will get the job done. If you’re hoping to finance the build of a new construction home, you will need a conventional construction-to-permanent loan.

Yes, but you’ll need to live in the home as a primary residence for one year or more before converting the home into a rental property. Check with your lender to confirm your current mortgage agreement terms to avoid committing occupancy fraud. Learn more about renting your home with a conventional loan in this article.