Conventional Loans

The term conventional loans is commonly used for any loan that is underwritten to standards set by FNMA (often called Fannie Mae) or FRMC (often called Freddie Mac).  The conventional loan limit hasn’t changed since 2006 and is currently at 417,000 for all states in the US.

Conventional Loan Information

Conventional loans can be fixed rate mortgages, adjustable rate mortgages, balloon mortgages, or hybrid loans. Almost any type of mortgage that you can get if it isn’t backed by the FHA or VA or USDA and is below the conventional loan limit, is considered a conventional loan.

Conventional Loans After a Short Sale

Conventional loans after a short sale are a common choice at financing a home after having a short sale in the past.  Getting a conventional loan after a short sale requires a waiting period of at least 4 years  for most lenders. Note: Specialty lenders may lend in as little as 12 months but will typically require a 20% down payment.

Conventional Loans After Bankruptcy:

While the waiting period for a Conventional loan after a bankruptcy is a bit longer than FHA, the eligibility date is based on the bankruptcy discharge date regardless if there was a property included in the bankruptcy. In some cases, this can be faster than FHA which is 3 years after the later of the discharge OR short sale/foreclosure.  The waiting period for owning a home with a conventional loan after bankruptcy is 4 years.

Conventional Loans After Foreclosure:

Getting a conventional loan after a foreclosure is one of the common ways that people will finance the home they choose to buy after foreclosure.  The waiting period for owning a home with a conventional loan after foreclosure is 7 years.

Conventional Loan After Deed-in-Lieu

Most lenders treat the waiting period for a deed-in-lieu the same as a Foreclosure which means that the waiting period is 4 years.

Conventional Loans: Find The Right Lender

Working with the right lender after a financial event can make all the difference between getting approved and getting denied.  Lenders will all have slightly different approval requirements when it comes to waiting periods, qualifications and explanations.  Be sure to take the time to get the right loan officer at the right lender who can help you get qualified for the best loan for your new home.