Conventional Loans

Conventional loans are mortgages that are not insured or guaranteed by government agencies such as the VA or FHA and typically follow the underwriting standards set by Fannie Mae and Freddie Mac. These loans may require private mortgage insurance when the down payment is less than 20 percent and can involve more restrictive guidelines due to the higher risk assumed by lenders. Borrowers can choose from conforming loan options up to $806,500 or jumbo loans above that amount, each with varying credit, documentation, and down payment requirements. Conventional financing offers valuable advantages, including flexible down payment options as low as 3 percent, the ability to receive gift funds for down payments and closing costs, and the opportunity to remove private mortgage insurance.