Conventional Loans

Refinance Conventional LoansConventional loans may be conforming loans with loan amounts below $417,000.00 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 $625,500.00.

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.

Conventional Mortgage | Borrower Requirements
  • Owner Occupied and Investment Property loan allowed
  • Minimum 640 Credit Score
  • Full income / asset documentation only – W2 and/or tax returns
  • 3% minimum down payment
  • 5% minimum borrower contribution required for loans over 80% loan to value
  • Approved buyer assistance can be used up to 100% combined loan to value
  • 45% Debt to Income (DTI) ratio / 50% DTI allowed with compensating factors
Conventional Mortgage | Loan Terms
  • 30 Year Fixed
  • 20 Year Fixed
  • 15 Year Fixed
  • 10 Year Fixed
  • 5/1 | 7/1 | 10/1 ARM – Adjustable Rate Mortgage
  • Interest only loans are available with LTV’s below 70%
  • Private Mortgage Insurance required for loans above 80% loan to value
Conventional Mortgage | Property Requirements

Properties eligible for Conventional financing include:

  • 1 family residence – single family residence (SFR)
  • 2 family residence – duplex (owner must occupy one unit)
  • 3 family residence – triplex (owner must occupy one unit)
  • 4 family residence – fourplex (owner must occupy one unit)
  • Single family Condominium – with HOA approval
  • Single family Townhouse – with HOA approval
Conventional Mortgage | Loan Limits

Conventional loans offer Standard Balance and High Balance financing options. These loan limits are standard across the board regardless of State or County.

  • Standard Balance Conforming Loan Limit: $417,000
  • High Balance Conforming Loan Limit: $625,500
Conventional Mortgage | Waiting Periods after Credit Hardship
  • 4 Years from Discharge of Chapter 7 Bankruptcy
  • 2 Years from Discharge of Chapter 13 Bankruptcy
  • 7 Years from Foreclosure
  • 2 Years from Short Sale or Deed in Lieu of Foreclosure with minimum 680 credit score and 20% down payment
  • 3 Years from Short Sale or Deed in Lieu of Foreclosure with minimum 680 credit score and 10% down payment