California Conventional Home Loans

Conventional Loans

Conventional loans, which are not backed by the federal government, are loans that meet guidelines set forth by Fannie Mae or Freddie Mac, who provide a secondary market for mortgages. The underwriting guidelines are tighter than other types of mortgages, but the short and long term costs can be significantly lower to the borrower(s).

Conventional At A Glance
Minimum Down Payment3.00%
Terms (Years)30, 25, 20, 15 Fixed and Adjustable
Gift Funds AllowedYes
Eligible HomesSingle & Multi-Family, Manufactured, Condo
Seller Paid Closing CostsUp to 3% of the Sales Price
Loan Limits$417,000 Most US Counties | $625,500 AK & HI
MaxDTI43% (Higher DTI’s May Be Allowed Up To 45% max)
Minimum Credit Score620 Mid-Score
AvailabilityAll US States, Owner Occupied, 2nd Home, Investment

*Other restrictions and guidelines apply. Please contact lender for full program details.

Is A Conventional Loan For Me?

If you have good credit, have not had any major derogatory credit events in the past 7 years, and can afford to put at least 3% down, a Conventional Loan may be the right choice. Your monthly payment could be much more affordable compared to other programs such as FHA.

Types of Conventional Loans
Fixed-Rate Mortgages

Fixed-rate fully amortizing loans are the most popular type of mortgage loan, as they offer a monthly payment that does not change over time, and result in a portion of the loan’s principal being paid down every month. Many borrowers find fixed-rate home loans to be an appropriate mortgage for their needs. Most fixed-rate mortgages are for loan terms of 15 or 30-years. A 30-year amortizing loan typically has lower payments than a 15-year loan, but a slightly higher interest rate than a 15-year loan.

Adjustable-Rate Mortgages

An adjustable-rate mortgage has a short-term fixed-rate term during which an interest rate is fixed. After this initial term, the interest rate on an adjustable-rate mortgage or “ARM” loan can change periodically at certain intervals. This adjustment permits the lender to adjust the interest rate to match changing interest rate environments. For example, a 3/1 ARM loan offers a fixed-rate for the first three years, adjusting once a year thereafter. A 5/1 ARM loan offers a fixed-rate for the first five years, adjusting yearly thereafter. At each adjustment the lender sets the interest rate by adding a margin or spread to the then current index rate.


Our team can help answer any questions.