A conventional mortgage is a home loan that is not offered or secured by the government entity. Conventional mortgages are available through private lenders such as banks, credit unions, or direct lenders. They tend to have stricter lending requirements due to the non-guarantee by the federal government.

Conventional vs Conforming:

Conforming and Conventional loans are not the same thing. Conventional loans refer to the type of loan. While conforming loans refer to the amount. County Loan limits change almost annually. This essentially determines what qualifies as a conforming loan.

Key Features:

·       Conventional loans typically require a minimum down-payment of 5%.

·       If down-payment is greater than or equal to 20%, no monthly mortgage insurance is required

·       Debt-to-income ratios must be 45% or lower

·       Qualifying FICO scores must be at least 620

·       Down-payment gifts are allowed

·       Lending available on all residential property types 1-4 units