Conventional/Conforming

These loans are backed by Fannie Mae and Freddie Mac. These government entities set the standards and guidelines for conforming loans. Base loan limit is currently set at $417,000. Some high cost areas such as California have higher limits. It must be noted that investors will still charge an additional cost for loans going over the base limit. Maximum limits are different in different counties so please call us for current loan limits in you area.

Loans secured by Fannie / Freddie require a minimum of 5% down from the buyers own funds. In States such as California which have declining market values, 10% down is the minimum contribution. Any loan which has less than 20% down / equity will require mortgage insurance. Many investors have a second tier of guidelines in which they underwrite loans. It is very common for an investor to have stricter guidelines for approving loans even though the criteria for approval have been met for a Fannie / Freddie loan. It also needs to be noted that Mortgage Insurance companies may not underwrite some loans if certain criteria they set are not met. It is extremely important your Loan Officer is fully informed as to which investors have secondary underwriting standards.