Conventional Purchase Loans
Conventional loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac, two stockholder-owned corporations. Conventional loans have significantly lower monthly mortgage insurance rates than FHA loans, do not require any up-front mortgage insurance and can be used for investment properties. However, conventional loans have higher credit standards than FHA loans and permit a seller to cover a buyer’s closing costs in an amount up to 3-6% of the sales price, depending upon the down payment.
The basic requirements for a Conventional Purchase loan are:
– 620 median credit score (660 if down payment is less than 10%)
– 3% minimum down payment
– Satisfactory documented Income
– If the property being purchased is an investment property, the borrower may not have more than ten (10) financed properties
– Property may not have more than 4 units
– In most counties, loan amount must be less than $494,500 if the property is a 1-unit, less than $633,050 if the property is a 2-unit, less than $765,200 if the property is a 3-unit and less than $801,950 if the property has 4 or less units.
Conventional loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac, two stockholder-owned corporations. Conventional loans have significantly lower monthly mortgage insurance rates than FHA loans, do not require any up-front mortgage insurance and can be used for investment properties. However, conventional loans have higher credit standards than FHA loans and permit a seller to cover a buyer’s closing costs in an amount up to 3-6% of the sales price, depending upon the down payment.
The basic requirements for a Conventional Purchase loan are:
– 620 median credit score (660 if down payment is less than 10%)
– 3% minimum down payment
– Satisfactory documented Income
– If the property being purchased is an investment property, the borrower may not have more than ten (10) financed properties
– Property may not have more than 4 units
– In most counties, loan amount must be less than $494,500 if the property is a 1-unit, less than $633,050 if the property is a 2-unit, less than $765,200 if the property is a 3-unit and less than $801,950 if the property has 4 or less units.