Florida Conventional Mortgage Loans

A conventional loan is a type of mortgage that is not backed by a government agency, such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the Department of Agriculture (USDA). Instead, conventional loans are offered by private lenders, such as banks, credit unions, or mortgage companies. These loans typically follow the guidelines set by Fannie Mae and Freddie Mac, two government-sponsored enterprises that buy and guarantee mortgages.

Conventional loans are often classified as conforming or non-conforming. A conforming loan meets the limits and guidelines set by Fannie Mae and Freddie Mac, whereas non-conforming loans, such as jumbo loans, exceed these limits.

To qualify for a conventional loan when buying a home, borrowers typically need a higher credit score, a stable income, and a lower debt-to-income ratio compared to government-backed loan programs. Down payment requirements are usually at least 3% to 20% of the home’s purchase price, depending on the lender and the borrower’s financial profile.

In general, conventional loans offer more flexibility for borrowers with strong credit, but they may come with higher interest rates or stricter qualification requirements compared to government-insured loans.