Conventional Loans (Fannie-Freddie)


​Fannie Mae (FNMA) and Freddie Mac (FHLMC) are two of the largest purchasers of mortgage loans from lenders. While they are not technically government entities, their policies and standards are closely monitored and greatly influenced by the government to avoid another foreclosure bubble. The mortgage loans that Fannie Mae and Freddie Mac buy are also known as "Conventional" loans. 


Conforming vs. High Balance Loans


The terms "conforming" and "high balance" refer to the amount financed. This is important to note because the interest rate offered for each is different. Fannie Mae and Freddie Mac determine  the maximum loan amounts they will allow in each of these two categories and review them annually for adjustment based on the cost of living.

Conventional Guidelines:

  • 2017 conforming loan limit is $424,100 for single family residences in all states (except Alaska and Hawaii)
  • High balance loan limits vary by county (2017 maximum in high cost counties is $636,100 for a single family residence)
  • Down payments may be as low as 3% (restrictions apply)
  • Minimum credit score is 620 with the best interest rates reserved for borrowers with scores of 740 or higher
  • Rates may be fixed or adjustable
  • Private mortgage insurance (PMI) is not required if your down payment is 20% or higher


Have a question about conventional loans? Call us at (707) 290-5167. We are here to help!

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