The difference between Conventional and Conforming Loans.

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Mortgage Banker with VanDyk Mortgage - VA, FHA, Conventional, VA Jumbo, Jumbo, Purchase Loans, & Refinance, Direct Lender NMLS 220268 / 3035

The difference between Conventional and Conforming Loans.

Ever since I can remember, these two terms are incorrectly referenced in the media, websites, and by Mortgage lenders and Realtors as well.   So what is the difference between a Conventional Loan and a Conforming loan?   Let's start with defining Conventional Loans.   Loans fall into two main categories:  Government and Conventional.  Government loans include FHA Loans (Federal Housing Administration), VA Loans (department of Veterans Affairs) and USDA Rural Development (United States Department of Agriculture).   If a loan is not one of the former three, VA, FHA, or USDA, then it is a Conventional Loan.   Conventional loans are offered by big banks, credit unions, FNMA (Fannie Mae), FHLMC (Freddie Mac), Mortgage Banks, etc.   A loan is first defined as either Government or Conventional.

So now let's talk about Conforming Loans.   Conforming loans are loans that meet the Underwriting guidelines and requirements of FNMA (Fannie Mae) and FHLMC (Freddie Mac).   Simple as that.               If the Fannie/Freddie Shoe fits, it's a conforming loan.  The next qualifier for conforming is the Conforming loan limit.  This is $417,000 nationwide.  However, in 2008, Congress approved higher loan limits for some high cost areas.  These loan limits go up to $729,750 for a single family residence, and have been extended through 2010.  Loans made under the higher loan limits are called Conforming Jumbo, Super Conforming, and Conforming High Balance Loans.   Here are the Conforming High Balance Loan limits for 2010.

A non-conforming loan is one that does not fit the Fannie Mae or Freddie Mac guidelines.  This can include Jumbo Loans, Portfolio Loans, Alt-A and subprime loans.   While Alt-A and Subprime loans are no longer available, we do offer Jumbo Loans and Portfolio Loans to our clients.   These offer higher loan limits than the Conforming limits. 

VanDyk Mortgage is your source for all of the above loans.  FHA, VA, USDA, Conforming, High Balance, and Jumbo.  

 

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Topic:
Lending / Financial
Location:
California
Tags:
seattle
los angeles
san diego
washington
california
usda
va
fha
freddie
fannie
fhlmc
fnma
conventional
conforming

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Rainmaker
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Brian Skaar

VA, Jumbo, FHA & Conv Direct Lender (760) 752-4480
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The Government Loan Pro's Blog includes topics on Government backed Home Mortgage Loans and Lending, VA loans, VA Jumbo Loans, FHA Loans, USDA Loans, FHA Jumbo Loans, VA High Balance Loans, FHA 203Ks loans, Conventional Loans, Jumbo Loans, No monthly PMI Loans, Piggyback loans, 80/10/10 loans, Conforming High Balance Loans, how to use your VA Home Loan Benefit, San Diego, Los Angeles, SF Bay Area, Northern California and Southern California Home Loans, Seattle - Tacoma - Everett Area Home Loans, Virginia Loans, Wyoming Home Loans, Washington Loans, Georgia Home Loans, Massachusetts Home Loans, Wyoming Home Loans, and more. Visit us at vandykfunding.com for even more info or to get started. Or give us a call at 760-752-4480 direct. NMLS ID: 3035 - VanDyk Mortgage Corp NMLS ID 220268 Brian Skaar - Loan Originator http://www.nmlsconsumeraccess.org/

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