Conventional Loans also call Conforming Loans because they conform to Lending guidelines set by Fannie Mae and Freddie Mac, these two government-sponsored enterprises (GSE’s) purchase mortgage contracts from Lender’s your local Mortgage Companies, Banks or lenders and sell them to the open Market as financial instruments.

Mortgages are held by lenders on their books also call “Portfolio” Loans. They are administered by servicing companies that collect and manage the mortgage payment collected from the Borrowers.

The Government does not guarantee or cover this Mortgage, such as FHA, VA or USDA. Instead, private mortgage insurance firms also called PMI cover more than 80 percent loan to value.

Conventional loan limits are higher than Government Insured Loans which make borrowing easier to buy or refinance tree occupancy forms, Owner Occupied or Primary Residences, Second or Holiday Homes which Investment or Rental Property whereas government loans are structured exclusively for Owner Occupied Property.

Federal National Mortgage Association

The Federal National Mortgage Association (FNMA), was created in 1938 to establish a secondary mortgage market for Mortgage loans. In 1968, Fannie Mae became a shareholder-owned company that could buy any mortgage, not just those insured by the government. Its stock was listed on the New York Stock Exchange.

FNMA’s HomeReady is their affordable, low down payment mortgage product designed for creditworthy low-income borrowers. HomeReady benefits include: Low down payment; as little as 3% down for home purchases, Flexible sources of funds with no minimum contribution from borrower’s funds, Non-occupant borrowers permitted, Cancellable mortgage insurance, Reduced MI coverage requirement for loan-to-value ratios above 90% (up to 97%). Pricing is better than or equal to Fannie Mae’s standard loan pricing (risk-based pricing waivers for LTV ratios over  80% with a credit score of 680 or higher. To see more about FNMA’s lending difference, click the link below

Freddie Mac FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Alongside the Federal National Mortgage Association (Fannie Mae), Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market.

The Freddie Mac Home Possible® mortgage offers more options and credit flexibility than ever before. So it helps your very low-to-moderate-income borrowers attain the dream of owning a home.

In addition to its down payment requirement of as little as 3%, Home Possible now offers more options to responsibly increase homeownership for more of your borrowers. Thus Co-borrowers who do not live in the home can be included for a borrower’s one-unit residence. The borrowers are permitted to have another financed property, and more –all with competitive pricing and the ease of a conventional mortgage.

The Best Mortgage Lenders

Helping you provide affordable solutions to more creditworthy borrowers to enhance your business and your communities at the same time.

While these products with 80% loan to Value, require Mortgage Insurance MI. At Mutual MTG, we have access to the lowest MI premiums and the Lender Paid MI which affects the final financial result. Give us a call or book a free video consultation. We have an expert group of realtors and loan officers that know the ins and outs of any loan.

We believe in helping you use real estate to invest in your future and grow financially

Let us guide you in your wealth-building process, call us for a free consultation today.