A conventional loan is a type of mortgage loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower. Conventional loans are much more common than government-backed financing.
There are also two types of conventional loans: conforming and non-conforming (Jumbo Loans). In order to be considered a conforming conventional loan, the loan must meet the guidelines set by Fannie Mae and Freddie Mac.
Fannie Mae (short for the Federal National Mortgage Association) and Freddie Mac (short for the Federal Home Loan Mortgage Corporation) are government-sponsored enterprises that purchase mortgages from lenders.
One of Fannie Mae and Freddie Mac’s most important ground rules is loan limit. It’s called baseline because the maximum amount — or limit — you can borrow is adjusted every year to match housing-price changes.
Non-conforming conventional loans, or Jumbo Loans, are conventional loans that exceed the loan limit.
Purchase
Refinance
New Construction
Low Down Payment
Competitive Interest Rates
Low Mortgage Insurance
Manufactured Housing Allowed