Program Features
First-time buyer | Primary home purchase | Primary home refinance |
Second home purchase | Second home refinance | Investment purchase |
Investment refinance | Short-term solution | Long-term solution |
Less-than-perfect credit | Recent financial hardship | Self employed |
Program Overview
Fannie Mae provides the underwriting guidelines for most conventional mortgages through it's automated underwriting engine called Desktop Underwriter, or DU.
Freddie Mac offers conventional mortgages with mostly similar guidelines to Fannie Mae except for slight differences. Some of the advantages of using Freddie Mac conventional financing is the ability to use co-mortgagers to qualify (similar to FHA), and the option to use 1 year income verification in some cases.
Borrower Requirements
- Owner Occupied and Investment Property loan allowed
- Minimum 620 Credit Score
- Income verification required - W2 only available
- Tax returns required for all self employed - All schedules
- As low as 3% down payment for First Time Homebuyers
- 5% minimum down payment for loans up to $417,000
- 10% minimum down payment for loans as high as $625,500
- 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
Loan Terms
- 30 Year Fixed
- 20 Year Fixed
- 15 Year Fixed
- 10 Year Fixed
- 5/1 | 7/1 | 10/1 ARM – Adjustable Rate Mortgage
- Private Mortgage Insurance required for loans above 80% loan to value
- Lender paid mortgage insurance available - PMI alternative
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
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
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*
- 4 Years from Short Sale or Deed in Lieu of Foreclosure*
* If mortgage debt is discharged in a Bankruptcy, and a foreclosure, short sale, or deed in lieu of foreclosure occurs AFTER the discharge, lenders may use BK discharge waiting periods and disregard waiting period from removal of liens.
Qualifying Basics
AUS | Both DU and LPA |
Manual Underwriting | No |
Mortgage Insurance | Required above 80% LTV |
Maximum Loan | Conventional Loan Limits |
Minimum Credit Score | 620 |
Minimum Down Payment | 5% down payment |
Maximum DTI | 50% DTI |
Special Features | Not specified |
Find a Mortgage Expert by State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawai'i
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
New Mexico
New York
North Carolina
North Dakota
South Dakota
Tenessee
Texas
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming