Photo by jhorrocks/iStock / Getty Images

Conventional Loans

Conventional loans are actually any type of creditor agreement that are not financed by the Veterans Administration (VA), or supported by the Federal Housing Administration (FHA). In general, all conventional loans are protected by the government sponsored entities such as Fannie Mae (FNMA) and Freddie Mac (FHLMC).

There are two different types of Conventional loans; Conforming and Non-Conforming loans. Conforming loans have to meet the guidelines set by Fannie Mae and Freddie Mac. Any loan which does not meet guidelines is a non-conforming loan.


  • Lower Fees:  Fees associated with Conventional loans frequently are lower than other loan products because the lender sets these rates.
  • Interest Rates:   Lenders determine the rates to offer borrowers based on their credit scores. A person with a solid credit score is often able to secure a lower rate.
  • Low Down Payment:  If at least one buyer is a first-time homebuyer*  you may qualify for a down payment of 3% for the purchase of a primary residence.
  • Higher Loan Amounts:  You can borrower up to $453,100 for a single family home. If you live in a designated "High-Cost Area" you can borrower up to $679,650 for a single family home.