A conventional mortgage is a common loan type that adheres to the rules set by Fannie Mae and Freddie Mac, two government-sponsored enterprises. Conventional loans are not government loans (e.g., FHA, VA, and USDA)
Conventional mortgages have minimum credit score requirements starting at 620
They require PMI or private mortgage insurance if your down payment is less than 20%.
Conventional loans can be used to buy primary, secondary, or investment properties.
The 2023 loan limit is $726,200 but varies by state and property type and increased by $79,000 from 2012
Conventional Loan Limits for 2023 |
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Number of Units | Continental U.S. | Alaska, Hawaii and High-cost areas. |
1 | $726,200 | $1,089,300 |
2 | $929,850 | $1,394,775 |
3 | $1,123,900 | $1,685,850 |
4 | $1,396,800 | $2,095,200 |
What happens if my loan is bigger than the conventional loan limit?
Loans above conforming loan limits represent jumbo loans. They usually do not require mortgage insurance but may require higher qualification standards for down payments and credit scores.
Conforming loans typically have lower rates than jumbo loans but this isn’t always the case and varies a lot with investors and market sentiment at any given moment.