Conventional Loans

Conventional loans are the most common types of loans in the mortgage industry. They’re funded by private lenders and banks and then sold to government-sponsored entities Fannie Mae and Freddie Mac who in turn pool those loans together and securities them for sale on the secondary market in what is called Mortgage Backed Securities (MBS).

These loans have stricter credit and income requirements than FHA loans. You’ll need a higher credit score and a lower debt-to-income ratio to qualify for a conventional loan than you would with an FHA loan.