Conventional loans are the most common loan type. They are also referred to as “conforming” loans as they must meet requirements set by Fannie Mae and Freddie Mac. The loan amount is crucial when considering a conforming loan as the loan amount must comply with your county’s loan limits. For most areas in California, the loan limits range from $453,100 to $679,650. Here are a few of the highlights for qualifying for a conventional loan:
- Borrowers typically put down 5-25%. However, eligible ﬁrst-time home buyers can put down as little as 3%
- Non-mortgage monthly debt payments combined with your monthly mortgage payments may not exceed 36% of your monthly gross income
- Have a “good” credit score (usually around 620 or higher)
Conventional loans may be used for primary, secondary, and investment homes.