Conventional Loans
The term "conventional" refers to a loan that complies with the criteria set forth by Fannie Mae or Freddie Mac. Government-sponsored companies Fannie Mae and Freddie Mac buy mortgages from lenders and offer them to investors. As a result, lenders have more money to place more suitable purchasers in homes.
Jumbo loans, which are mortgages that are larger than the conforming loan restrictions, are one kind of typical non-conforming mortgage. A loan amount above the conforming county loan limit may be considered a jumbo loan if the county is not considered a 'high-cost' county.
There is no uniform set of standards for borrowers because "traditional loans" cover a variety of distinct sets of regulations. However, in general, the credit standards for conventional loans are more stringent than those for government-backed loans like FHA.
The Basics
Down Payment
It’s possible for first time home-buyers to get a conventional mortgage with a down payment as low as 3% (97% loan-to-value). However, the down payment requirement can vary based on your personal situation and the type of loan or property. Loan-to-value (LTV) is how much your loan (expressed as a percentage) IS compared to the property value. So, 95% LTV means your loan will be 95% of the value of your property, meaning you'll be putting 5% down in addition to closing costs. Property value is based on the LESSER of said property's purchase price or appraisal value:
Fannie Mae LTV Chart
Fannie Mae Loan Programs
Low Down
Payment
HomeReady >Fact Sheet
The HomeReady® mortgage includes innovative income flexibilities that can help you qualify for an affordable mortgage with a down payment as low as 3%.
97% LTV Options >Fact SheetView 97% LTV/CLTV/HCLTV financing options that help serve qualified first-time home buyers and support the refinance of Fannie Mae loans.
HFA Preferred >HFA Preferred™ pairs features of HomeReady with the flexibilities from local housing finance agencies (HFAs), designed to serve more low- to moderate-income borrowers.
Home Renovation, Construction, and Energy Improving
HomeStyle Renovation >Fact Page
Learn how HomeStyle® Renovation provides a convenient and flexible way to finance home improvements and repairs as part of the purchase or refinance mortgage.
Construction Products >Discover products and options to help you with financing for construction projects.
HomeStyle Energy >Whether they’re purchasing a home or refinancing their current one, help your borrowers finance upgrades to reduce utility costs and improve the comfort and safety of their homes.
Accessory Dwelling Units (ADUs) >ADUs can be financed using a range of Fannie Mae loan options and allow borrowers the flexibility to earn rental income from tenants or provide additional space for extended family.
Rural Areas, Underserved Communities and Down Payment Assistance
Manufactured Housing >
See how our innovative offerings, including MH Advantage, can support affordable alternatives to site-built homes.
Down Payment Assistance >Down payment assistance helps overcome two of the greatest barriers to homeownership: down payments and closing costs.
Shared Equity Programs >Discover how Community Land Trusts and other shared equity programs can support your first steps to achieve the lifelong goal of homeownership.
Affordable Refinance
Refi Now >
A refinance option that provides expanded eligibility, resulting in new opportunities for you.
HFA Preferred >If you have an existing Fannie Mae mortgage you may be able to benefit from a high LTV refinance option.
Freddie Mac LTV Charts
Freddie Mac Loan Programs
Fixed Rate >
Fixed rate products are perfect for borrowers that are looking for - stable payment plans and building equity quickly or taking advantage of lower payments.
HomePossible >Fact SheetRead FAQ
A HomePossible loan product is a great option for borrowers that, or desiring a low down payment solution with flexible source of funds, very low to low income, borrower, or first time homebuyers and retirees.
HomeOne >Fact SheetRead FAQ
A HomeOne mortgage product is great for first time homebuyers, borrowers who need flexible financing, and people purchasing single-family homes, including townhouses and condos.
No Cash-out Refinance >
This is a great option for borrowers who want to lower their payment or consolidate second mortgages into lower single mortgage rates.
CHOICE Renovation >Fact SheetRead FAQ
This renovation product is great for borrowers looking for convenience and cost savings by financing their home purchase and renovation cost in single-closing transaction; homeowners who need financing to make improvements or repairs to their existing homes, or they intend to purchase; or first time homeowners looking to age in place or multigenerational families in need of living space customization.
Manufactured Homes >Read FAQ
Perfect for low and moderate-income borrowers; those seeking conventional financing for manufactured homes; or borrowers looking at HomePossible mortgages for fixed rate or 10/6 and 7/6 Adjustable Rate Mortgages.
CHOICE Home Mortgage >Fact SheetRead FAQ
This is a great option for those looking to purchase factory-built homes and receive conventional financing convenience.
NMLS 1660690 | AZMB 0944059
3100 W Ray Rd Suite 201, Office 209
Chandler, AZ 85226
© 2021 NEXA Mortgage, LLC. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Lender.
AZMB# 0944059Licensed by the Dept of Financial Protection and Innovation under the CRMLA
Texas: CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT'S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT'S WEBSITE AT WWW.SML.TEXAS.GOV. Privacy Policy | NMLS Consumer Access