Loan Program
Conventional Loans
A conventional loan is a mortgage that is not insured by a government agency and instead follows guidelines set by Fannie Mae or Freddie Mac. For many Downriver buyers with solid credit, it is the lowest-cost way to finance a home, and private mortgage insurance can be removed once you build enough equity.
What it is
- A conforming mortgage underwritten to Fannie Mae or Freddie Mac guidelines.
- Available for primary homes, second homes and investment property.
- Fixed-rate terms of 10 to 30 years, plus adjustable-rate options.
Who it's for
- Buyers with established credit and a steady two-year work history.
- Homeowners who want mortgage insurance that can be removed later.
- Anyone buying a second home or rental property, which government loans do not allow.
Typical requirements
- Down payments commonly start at 3% for qualified first-time buyers and 5% for repeat buyers.
- Credit score generally 620 or higher, with better pricing at higher scores.
- Debt-to-income ratio typically within agency limits after full documentation review.
- A property appraisal and clear title.
Guidelines vary by lender and change over time. Meeting these items does not guarantee approval, and all loans are subject to credit and property approval.
Advantages
- Private mortgage insurance can be cancelled as equity grows.
- No upfront government funding or guarantee fee.
- Works for primary, vacation and investment properties.
Trade-offs
- Credit and debt-to-income standards are stricter than FHA.
- Pricing is more sensitive to credit score and down payment.
FAQ
Conventional Loans: common questions
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