Conventional loans may be conforming loans with loan amounts below $453,100 in most areas across the US and non-conforming loans or commonly known as “Jumbo Loans” over the $417,000.00 limit. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. Some area’s in Colorado with a higher than average home prices may be eligible for a High Balance Conforming Loan up to $679,650.
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, underwriting guidelines, borrower credit and income requirements, down payment, and suitable properties. Conventional mortgages typically refer to any loan that is not Government insured. A common misunderstanding about conventional mortgages is that a large down payment is required in order to use this home loan program. Conventional financing allows as low as a 3% down payment when used in conjunction with a private mortgage insurance carrier.
Fannie Mae and Freddie Mac announce new loan limits every year.