Why Choose a Conventional Mortgage (Fannie Mae/Freddie Mac)?

A conventional mortgage refers to any loan that is not insured or guaranteed by the federal government, as opposed to government-insured loans including

Federal Housing Administration (FHA)

U.S. Department of Veteran Affairs (VA)

U.S. Department of Agriculture (USDA)

Conventional mortgages (whether conforming or not) typically have a slightly higher down payment than government loans; however, this loan option normally provides more flexibility with fewer restrictions.

Down payment minimum 3% of sales of price unless value comes in lower

Purchase of Single Family Primary Residence

Gift for down payment and closing costs allowed

Seller can credit up to 6% of sales price towards buyers closing costs and prepaid items, conditions apply

Higher loan limits for multi-family up to 4 units

Special first-time home buyer programs available

General Guidelines:

  • Low down payment
  • Primary residence, investment property or second home
  • 1-4 family owner occupied condos condo must be approved through Capital Mortgage Funding
  • 85% max LTV – Fixed Rate for 1 unit Investment Property, 75% max LTV – Fixed Rate for 2-4 unit Investment Property
  • 90% max LTV for second home
  • Escrow not required if LTV is 80% or lower

*Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.