Conventional Home Loans

What is a Conventional Home Loan?

A Conventional Home Loan is essentially a mortgage that is not guaranteed or insured by the federal government. While these loans are not government-backed, they still follow the guidelines set forth by government sponsored enterprises such as Fannie Mae and Freddie Mac. Conventional Loans involve adjustable rate and fixed rate loans which offer varying interest rate structures and payment terms.

There are two types of conventional loans “conforming” and “non-conforming”. Conforming loans follow guidelines set forth by Fannie and Freddie while non-conforming do not, but are still considered conventional.

Types of Conventional Loan Programs

Conventional Loan Requirements

What types of properties apply?

Maximum loan amount

The maximum loan amount for a conventional conforming loan will vary based on the county. For example, counties like Los Angeles allow for the maximum amount of $625,500 whereas other counties in California allow for the lowest maximum amount of $417,000. To find what the currently limit is in your county, visit the Fannie Mae site directly at https://www.efanniemae.com/sf/refmaterials/loanlimits/

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