In today’s marketplace, most conventional loans meet the standards set by Fannie Mae (FNMA) or Freddie Mac (FHLMC). These mortgages are also referred to as “Conforming Loans”. Fannie Mae and Freddie Mac establish the lending guidelines and set the loan amount limits for these loans which vary by county and state.
Conventional Mortgages that don’t meet the lending guidelines set by Fannie Mae or Freddie Mac or exceed their loan amount limits are considered “Non-Conforming”. Non-Conforming loans are offered by financial institutions and private investors. The lending guidelines for these loans may vary by loan product.
Benefits of Conventional Loans:
- Loans with less than 80% loan to home value ratio do not require mortgage insurance
- Financing up to 97% loan to value ratio
- Loan amounts as high as $4,000,000
- Borrowers may have ownership of multiple financed properties at one time
- Loans are available for financing of second homes and investment properties