Conventional Loans

What is a Conventional Loan?

A conventional loan is a mortgage that is not backed by the Federal Government, but by private mortgage insurance companies. They are offered by private lenders and meet the Fannie Mae and Freddie Mac conforming loan requirements and guidelines. They require at least a 620 credit score and a down payment between 3% – 20% of the purchase price.

Conventional Loan Requirements

Minimum 620 credit score 3% – 20% down payment

36-48 month waiting period after a bankruptcy or foreclosure

Maximum 43% debt-to-income ratio

Two years of stable employment history

Proof of income (W2’s, tax returns)  

Types of Conventional Loans Traditional Conventional Loan A traditional home loan requiring a 5% – 20% down payment and a 620 credit score. Mortgage insurance is only required if the loan-to-value ratio (LTV ratio) is above 80%. Minimum 620 credit score 5%-20% down payment 43% maximum debt-to-income ratio  

Conventional 97 Loan

A conventional 97 loan requires just a 3% down payment, which is even lower than FHA (3.5%). Borrowers must have a 680 credit score and buying the property as their primary residence. 43% maximum DTI ratio