CONFORMING CONVENTIONAL LOANS:

Conforming loans are loans underwritten to meet guidelines of Fannie Mae and/or Freddie Mac, whom provide an implicit form of government guarantee. On conforming loans, it is Fannie and Freddie who dictate the requirements for minimum down payment, allowable sources of buyer down payment, and maximum seller assist limits.

Standard conforming limit is $417,000 for 1 unit properties, and is higher for 2, 3, or 4 unit properties that are zoned residential. Conforming loans recognize 3 types of occupancy (primary residence, second home, and investment property). The minimum down payment and maximum seller assist permitted are as follows:

PURCHASE, PRIMARY RESIDENCE
1 to 4 UNIT PROPERTIES, (attached or detached),
PLANNED UNIT DEVELOPMENTS (PUDs), CONDOMINIUMS.

PURCHASE, SECOND HOME RESIDENCE
1 to 4 UNIT PROPERTIES, (attached or detached),
PLANNED UNIT DEVELOPMENTS (PUDs), CONDOMINIUMS.

PURCHASE, INVESTMENT PROPERTY (NON-OWNER OCCUPIED)
1 to 4 UNIT PROPERTIES, (attached or detached),
PLANNED UNIT DEVELOPMENTS (PUDs), CONDOMINIUMS.

Seller assist limits on conforming purchase transactions

NON-CONFORMING CONVENTIONAL LOANS:
Non-conforming conventional loans are loans that do not meet the requirements of Fannie Mae and Freddie Mac. Non-conforming loans are generally held in a bank’s portfolio, as there is no government backing for non-conforming loans and therefore currently no secondary market for most types of non-conforming loans. The most common type of non-conforming loans are loans that are larger than conforming limit (also known as Jumbo loans). Jumbo loans will vary in amount of down payment requirement, but are generally to maximum80%LTV/CLTV (75%LTV/CLTV in same cases when loan amount is in excess of 1,500,000).

Seller assist limits on non-conforming purchase transactions.