Conventional mortgage loans

A high-balance loan is a conforming conventional loan with a loan amount above the national baseline ($832,750 for 1-unit in 2026) but within your county’s designated high-cost ceiling (up to $1,249,125 for a 1-unit in 2026). It’s still a Fannie Mae or Freddie Mac loan — the same guidelines, down payment options, PMI eligibility, and documentation requirements apply. A jumbo loan exceeds the high-cost county ceiling entirely — it moves into portfolio or private investor financing with different underwriting, different lenders, and typically different pricing. Whether your loan is conforming, high-balance, or jumbo depends entirely on your county’s limit. We confirm your tier before any discussion of rates or programs.

Yes — conventional is one of the few loan types that covers primary residences, second homes, and investment properties under the same general program. The parameters change by occupancy type: second homes typically require 10% down; investment properties commonly require 15–25% down with 6 months of reserves commonly expected for multi-unit investment purchases. Different lenders in our network price investor scenarios very differently — shopping wholesale matters particularly for investment property, where the rate and reserve requirement variation between lenders can be substantial. Eligibility and pricing are lender- and program-specific.

There is no single score minimum across all conventional underwriting paths. Fannie Mae’s Desktop Underwriter no longer applies a minimum credit score, while manual underwriting, other programs and lender requirements can differ. The full credit profile, income, debts and property still need review. See Fannie Mae’s credit-risk update.

Lawful U.S. residents — including permanent residents (green card holders) and many non-permanent residents — may qualify for conventional financing per Fannie Mae Selling Guide B2-2-01. Fannie Mae permits a valid SSN or ITIN, subject to its residency and documentation requirements. Ask which lenders accept your circumstances. The same core terms generally apply as for U.S. citizens: same down payment options, same qualifying criteria, same conforming limits. What varies by lender is how comfortable their underwriting team is with specific visa types and documentation — which is why having access to 100+ lenders matters. Borrowers residing abroad (not in the U.S.) are typically not eligible for conventional financing and would be evaluated under our Foreign National program. Consult a licensed immigration attorney for questions about visa or residency status.

Yes — conventional is available to self-employed borrowers, though the documentation requirements are more involved than W-2 qualification. Agency guidelines typically require two years of self-employment history with two years of personal tax returns and business returns if applicable, and income is calculated from net after deductions — not gross receipts. This is where high write-offs can create a challenge: if your Schedule C shows low net income because of legitimate deductions, that reduced figure is what conventional underwriting uses. If your tax return net income doesn’t support the loan amount, Non-QM programs (bank statement, 1099-only, P&L) use alternative income calculations. We evaluate both paths before recommending one.

DTI (debt-to-income ratio) measures your total monthly debt obligations — including the new mortgage payment — against your gross monthly income. Conventional programs commonly allow up to 45–50% DTI with strong compensating factors like higher credit or significant reserves. That limit isn’t fixed — Fannie Mae and Freddie Mac run your loan through an automated approval system that weighs your full financial picture, which is why the same DTI gets approved for one borrower and not another. Some lenders also apply stricter limits than the agency allows. We identify which lenders in our network work with your specific DTI before anything is submitted.

The minimum is 3% for income-eligible borrowers under HomeReady (Fannie Mae) and Home Possible (Freddie Mac) — both have income limits and property eligibility requirements. Most conventional borrowers use 5% as the standard minimum, which has fewer restrictions. Your down payment affects more than the loan amount: it determines your LTV tier (which affects rate pricing), your PMI requirement and cost, and your reserve requirements. We walk through all scenarios — including the actual monthly cost difference between 5% and 10% down — before you commit to a number.

Borrower-paid PMI commonly applies with less than 20% down. For many covered loans, you can request cancellation at 80% of original value, subject to payment history and other conditions. Original value generally means the lower of the purchase price or original appraisal. Automatic termination generally occurs when the loan is scheduled to reach 78% and payments are current. Current-value requests and lender-paid insurance have different rules. Ask your servicer which options apply; see the CFPB’s PMI guidance.

Eligible gifts can cover the entire down payment on a one-unit primary residence under Fannie Mae rules, including with less than 20% down and no minimum contribution from the borrower. Other property types and occupancy situations can have different contribution rules. The donor and transfer must meet documentation requirements, and gifts are not permitted for investment properties under this policy. Confirm the applicable program and lender requirements before moving funds. Compare FHA financing alongside conventional options based on your full situation, not gift reliance alone.

A wholesale broker has access to 100+ lenders and reviews their pricing and program guidelines to identify the right fit for your scenario — before a single application is submitted. Wholesale lenders price without the overhead of retail branch networks — which is why wholesale pricing is often more competitive than retail bank pricing for the same Fannie Mae or Freddie Mac loan. Some of the most competitive conventional rates are only available through the wholesale channel. Beyond pricing, a broker matches your file to the lender whose overlays and guidelines best fit your specific scenario — something a single-bank pre-approval cannot provide. Wholesale pricing advantage is scenario-dependent and varies by lender and market conditions.

A rate-and-term refinance replaces your existing loan with a new one at a different rate and/or term — no cash out beyond closing costs. A cash-out refinance pays off your existing loan and gives you the difference between your new loan amount and your remaining balance as cash. Cash-out refinances are priced at a slight rate premium relative to rate-and-term, and maximum LTV is typically lower (commonly 80% for a primary residence cash-out on conventional). Both require a full appraisal in most cases. Whether a refinance makes financial sense depends on your current rate, remaining balance, and purpose — we model the break-even before recommending any refinance transaction.

Discount points are prepaid interest — one point equals 1% of the loan amount, paid upfront in exchange for a lower rate over the life of the loan. Whether buying points is worthwhile depends entirely on your break-even timeline: divide the upfront cost of the points by the monthly savings they produce. If you plan to stay in the home and keep the loan long enough to reach that break-even (commonly 4–7 years depending on current market), points may make financial sense. If you’re likely to refinance, sell, or pay down early, the upfront cost may not be recovered. We calculate this for every borrower before recommending a rate/point combination — different lenders also have different point/rate tradeoffs, which is another reason comparison matters.

Sources: CFPB conventional-loan definition, Fannie Mae borrower eligibility, Fannie Mae gift funds, HUD streamline refinance, Fannie Mae debt-to-income guidance and the CFPB PMI guidance above. Reviewed September 22, 2026.