Conventional Loans

Any residential mortgage loan other than a VA or an FHA loan. A conventional loan may be conforming or non-conforming. Government Loans purchased or guaranteed by government organizations such as the Government National Mortgage Association (GNMA or Ginnie Mae). Ginnie Mae which is part of HUD helps increase the supply of affordable housing by guaranteeing securities issued by private lenders backed by pools of residential mortgages insured by three federal agencies -- the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA) and the Rural Housing Service.

Conforming Loans is a loan that conforms to the guidelines established by Fannie Mae or Freddie Mac. These guidelines establish the maximum loan amount, down payment, borrower credit & income requirements, and suitable properties.

Lenders that make loans established to these guidelines may sell those loans to Fannie Mae or Freddie Mac. These lenders may retain the servicing on these loans - so that a borrower will continue to make payments to the original lender. Conforming loans make up the majority of loans in the U.S. Conforming Loan Limits Mainland U.S.$227,150; $290,650 for 2 units; $351,300 for 3 units and $436,600 for 4 units.