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Conventional Loan Programs
About Conventional Financing
Conventional Loans are mortgage loans which are not guaranteed or insured by the federal government. Instead, these mortgage loans conform to the guidelines and national standards set forth by government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac.
These stockholder-owned corporations were created by the government to buy and sell conventional mortgages. They set the maximum loan amounts, as well as guidelines for borrowers’ income, credit scores, and down payments. Conventional loans can be conforming or non-conforming. Conforming loans follow the terms and conditions established by Fannie Mae and Freddie Mac, while non-conforming loans (also known as jumbo loans) exceed the lending limits. Depending on market conditions and trends, about 35-50% of mortgage loans are conventional.