Conventional Loans

Conventional Loans

Conventional loans are mortgage loans offered by government sponsored lenders. These loan types include:

  • Fixed Rate Loans
  • Jumbo / Construction Loans
  • 3% minimum down payment
  • 1st/2nd combo option to avoid mortgage insurance payment>
  • 620 minimum credit score

 

Conforming Loans

Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae and Freddie Mac. Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.

Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.

 
Conventional Loan Limits
 

Conventional Conforming Loan Limits
Properties Located in Units Maximum Loan Amount*
California 1 $424,100
2 $543,000
3 $656,350
4 $815,650
*Maximum Loan Amount is the lesser of amount as per table above or Maximum County Limit (//www.fanniemae.com/singlefamily/loan-limits)
 

 

Conventional High Balance / Super Conforming Loan Limits
Only certain loan amounts in certain geographic areas are eligible for this program.
Properties Located in Units Minimum Base Loan Amount Maximum Base Loan Amount
California 1 $424,101 $636,150
2 $543,001 $814,500
3 $656,351 $984,525
4 $815,651 $1,223,475