A conventional loan is a loan that is not backed by the Federal Housing Administration (FHA) and the Department of Veteran Affairs (VA). Conventional loans are also known as Conforming loans because they conform to the guidelines established by Fannie Mae and Freddie Mac – which are sponsored enterprises to make mortgages more available and affordable.
Here are some of the benefits to a Conventional Loan:
- Mortgage insurance may not be required*
- Can be used on all property types
- There are more loan program options to choose from
- A borrower can hold numerous conventional loans
*Ask Loan Officer for further details.