In our next series of blog posts, we will define the most common types of mortgage loan programs available to the consumer. Mortgages can be defined as either government-backed or conventional. Mortgages not guaranteed (or insured) by Government agencies such as the Federal Housing Administration (FHA), the Department of Veteran Affairs (VA) or the US Department of Agriculture (USDA) are known as conventional home loans.
Conventional loans are guaranteed by private lenders such as banks, credit unions or mortgage companies, or by government-sponsored enterprises (GSEs) such as Freddie Mac and Fannie Mae.
Conventional loans represent approximately two-thirds of the home loans issued in the United States. Conventional loan guidelines are currently as follows:
MAXIMUM LOAN AMOUNT
MINIMUM DOWN PAYMENT
10, 15, 20 OR 30 YEARS
28% HOUSING / 36% TOTAL DEBT
2% OF SALES PRICE INVESTMENT PROPERTY
3% OF SALES PRICE LTV 90.01-95%
6% OF SALES PRICE LTV 75.01-90%
9% OF SALES PRICE LTV 75% OR BELOW