Conventional loans are any mortgage that is not guaranteed or insured by the federal government. Although a conventional loan is not insured or guaranteed by the government, it still follows the guidelines of government-sponsored enterprises, Fannie Mae and Freddie Mac.
Conventional loans may be “conforming” and “non-conforming”. Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac. These guidelines put the maximum purchase amount for a first mortgage at $417,000 (maybe higher, subject to county loan limits) for a single-family dwelling. If the purchase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan.
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