What are Conforming Loans? A Conforming mortgage loan, often referred to as a Conventional loan, is a mortgage that adheres to the standards set by Fannie Mae and Freddie Mac, two government-sponsored enterprises. These standards encompass various criteria, including loan amount limits, credit score requirements, debt-to-income ratios, down payment necessities, and other factors crucial for determining a borrower’s eligibility and qualification.
Exploring the Types of Conforming Loans Conforming loans come in various forms, notably fixed-rate mortgages and adjustable-rate mortgages (ARMs). Fixed-rate mortgages offer the security of a constant interest rate and monthly payment throughout the loan’s duration, aiding homeowners in managing their monthly financial planning. The most prevalent form is the 30-year fixed-rate mortgage, though 15-year and 20-year options are also available.
2024 Conforming Loan Limits and Down Payment Essentials For 2024, the conforming loan cap is set at $766,550 (base loan limit), with certain high-cost areas permitting limits up to $1,149,825 (high balance loan limit) for single-unit properties, including single-family homes, townhomes, or condominiums. For multi-unit homes (2-4 units), these limits are higher.
The base loan limit requires a minimum down payment of just 3% for first-time homebuyers. For high-balance loans, down payments can be as low as 5%.
Discover HomeReady and HomePossible Loans HomeReady and HomePossible loans, provided by Fannie Mae and Freddie Mac respectively, are tailored for creditworthy low-income borrowers. These loans typically feature lower interest rates and mortgage insurance premiums. To qualify, your income, which can include rental and boarder income, should be less than 120% of the Area Median Income (AMI). Check your eligibility here.
Securing a Conforming Loan with Matt Jolivette at Associated Mortgage Brokers To be eligible for a conforming loan, applicants must meet certain criteria, including a minimum credit score (typically around 620) and a debt-to-income ratio not exceeding 45% (with some exceptions up to 50%). Essential documentation of income, assets, and employment history is also a prerequisite.
I am dedicated to guiding you through the process of securing a conforming loan with competitive rates. Known for my expertise and commitment to client satisfaction, I am your reliable partner for obtaining pre-approvals, swiftly closing home loans, or refinancing your existing mortgage.