Understanding Conventional Loans

Conventional Loans In Los Angeles CA

Understanding Conventional Loans

Do you as a borrower care to understand the meanings of conventional loans, FHA, conforming loans, non-conforming loans, portfolio, hard money, subprime, Fannie Mae, Freddie Mac, jumbo, super jumbo, Mambo Jambo?

Our guess is probably not.

The Lendersa Score shows you the exact chances you have in getting any kind of loan from any available source, and explains the advantages and disadvantages of each. We know that borrowers only care about getting the best rate and terms, low monthly payments, low fees and a smooth approval process.

"Conventional Loan” can be a very confusing term for borrowers and even also for lenders. If you look it up on different websites you will likely find inconsistencies in defining it for the simple reason that it actually has two separate definitions which very often getting mixed up.

Definition #1 - Any loan that is made subject to the strict underwriting guidelines of Fannie Mae or Freddie Mac. These two Government Sponsored Entities (GSE) lay down the rules for Conventional Loans because they can buy the loans from the lenders after the loan is funded. The loans must conform exactly to the GSE’s strict underwriting requirements. They are also known as “Conforming Loans”. The maximum Conventional loan amounts on single family dwelling in most counties of USA is $424,100. In some high-priced areas the maximum can be as high as $636,150, and even higher in a few remote locations. Those limits are higher for 2-unit, 3-unit, and 4-unit dwellings (see table below or enter your Zip code to find the max Conventional loan amount for the area entered).

Definition #2 - A mortgage loan that is not guaranteed or insured by any government agency such as Federal Housing Administration (FHA), Farmers Home Administration (FmHA), or the Department of Veterans Affairs (VA). It is often sold to Fannie Mae or Freddie Mac, but it does not have to. According to this definition a Conventional Loan includes definition #1 or non-Conforming Loans, Portfolio Loans, Subprime loans, Jumbo Loans and even Hard Money loans. For the sake of clarity, only definition #1 is used on our site to describe Conventional Loans.

You are invited to learn about all the different kinds of loan programs, but since many programs may not even apply to your particular financial situation, we suggest you avoid the brain damage and find out first what loan program best meets your needs.

You will get separate Scores for each loan program you qualify for, and will then be directed to improve the Scores, evaluate the relative advantages and disadvantages of each program.

If you want to you may then present your scenario to qualified lenders for actual loan quotes.

Apply today for conventional loans in Los Angeles, CA with Lendersa!

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You may enter any location, city, county, or state. For the most accurate results, enter the complete property address.

First Mortgage Loan Limits

The following chart contains the general loan limits for 2017:



Units
General Loan Limits
Contiguous States,
District of Columbia,
and Puerto Rico
Alaska, Guam, Hawaii
and U.S. Virgin Islands
One $424,100 $636,150
Two $543,000 $814,500
Three $656,350 $984,525
Four $815,650 $1,223,475

The hight cost area loan limits are established for each county (or equivalent) are published on Fannie Mae's website and on FHFA's website. The maximum limits for 2017 are:



Units
High-Cost Area Loan Limits
Contiguous States,
District of Columbia,
and Puerto Rico
Alaska, Guam, Hawaii
and U.S. Virgin Islands
One $636,150 $954,225
Two $814,500 $1,221,750
Three $984,525 $1,476,775
Four $1,223,475 $1,835,200
* A number of states and Puerto Rico do not have and high-cost areas in 2017.


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