Conforming Conventional Loans
Loan is less than the maximum loan amount set by the Federal Housing Finance Agency and meets additional loan standards set by Fannie Mae or Freddie Mac, it’s called a conforming loan.
Nonconforming Conventional Loans
If a conventional loan exceeds FHFA loan limits or uses underwriting standards that are different from those set by Fannie Mae and Freddie Mac, it’s called a nonconforming loan. A jumbo loan is a common type of nonconforming conventional loan. You may need a jumbo loan to finance more than $484,350 in most U.S. counties.
Fixed-Rate Conventional Loans
Whether they’re conforming or nonconforming, all mortgages require you to pay interest. With a fixed-rate conventional loan, the interest rate stays the same for as long as you have the mortgage.
Adjustable-Rate Conventional Loans or ARM
Conventional loans with adjustable rates, also known as hybrid ARMs, have rates that may go up or down over time. ARM rates usually adjust annually, after an initial fixed-rate period of three, five, seven or 10 years.
Low-Down-Payment Conventional Loans
a) 3% down payment - HomeReady and Home Possible are conventional mortgage options that allow down payments as low as 3% and reduced Mortgage insurance. Income limits apply.
b) 5%, 10%, 20% down payment
Buying a fixer-upper is one way to achieve home ownership when prices are high or move-in-ready inventory is low.
The CHOICERenovation loan and HomeStyle loan are two types of conventional mortgages that allow you to finance a home purchase, as well as the necessary renovations, at the same time.