Conventional Financing

The conventional mortgage most people think of is the “conforming” loan that meets the requirements of Freddie Mac(FHLMC) and Fannie Mae(FNMA). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans. Conventional loans typically require a down-payment 5%. Fannie Mae also offers HomeReady low-down payment financing with reduced rates and PMI only requiring 3% down. Freddie Mac also offers a Home Possible program with similar features. If putting down less than 20% then borrowers will be required to purchase private mortgage insurance (PMI). While conventional loans are many people’s typical idea of a mortgage, we have many programs and will help you decide which best fits your specific needs! Fill out our qualifier and we can schedule a consultation.