Conventional mortgage loans aren’t insured or guaranteed by the government, but are rather backed by private lenders. Conventional mortgages are sold on the secondary market to either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac).
Conventional mortgages have a lending limit of $484,350 for a one-unit dwelling.
A jumbo mortgage is a type of financing that exceeds conventional loan limits and is not eligible to be purchased by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements.
Jumbo loans specifically include lending amounts from $484,350 up to $3,000,000.
An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S.
Department of Housing and Urban Development (HUD). FHA loan programs are particularly beneficial to first-time buyers or those with less available cash. Down payment requirements are lower than for conventional loans.
VA loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.
USDA loans are made by private lenders and guaranteed by the U.S. Department of Agriculture (USDA). Developed for moderate-to-low income homebuyers in eligible rural areas. Includes 97% of the geographic United States.
The Reverse Mortgage loan also known as a Home Equity Conversion Mortgage (HECM) is insured by the Federal Housing Administration, a federal agency under the U.S. Department of Housing and Urban Development (HUD). This program allows homeowners age 62 or older to eliminate debts, pay for healthcare or cover daily living expenses by accessing a portion of their home equity in cash, monthly payments, or a growing line of credit.
A Non-Qualified Mortgage (Non-QM) is any home loan that doesn't meet the standards set forth in the regulatory reform imposed after the 2008 housing crisis. Millions of borrowers that are credit worthy have been unable to qualify for agency loans because they don't meet the underwriting criteria for conventional or government financing.