Conventional Loans

Conventional loans are loans not guaranteed by the federal government. This allows mortgage lenders to place more flexible terms on them. For instance, a conventional loan can be a fixed rate loan, an adjustable rate loan, or a loan with unique terms and conditions that are set by the mortgage lender.

Conventional loans vary widely in their terms, criteria, and underwriting requirements unlike government backed mortgage loans. The credit and underwriting standards for conventional loans are higher than government-insured loans, and the loan standards for approval are based on predetermined loan to value ratios and the borrowers credit history. 

Normally, a 5% down payment is required for conventional mortgages, unlike FHA, VA, or USDA loans.

Conventional loans conform to both Fannie Mae and Freddie Mac underwriting guidelines.