Types of Real Estate Loans

Conforming Conventional Loans

Conforming loans are mortgages that conform to FNMA ( "FannieMae") and Freddiemac guidelines, the two largest purchasers of mortgages. These are loans on residential properties of not more than 4 units, with maximum loan limits based upon  the number of units.  As of January 2005-20012 the single unit limit is $417,000. Properties may be owner occupied or investment property, and must meet minimum investor guidelines. Loan amounts are larger for 2-4 units. Loan for residential properties in excess of 4 units are consider Nonconforming loans.

Loans may be adjustable, fixed, or fixed for a period of time ( Usually  3 to 7 years ) with a conversion to an adjustable rate, or in some cases, to a different fixed rate for the remainder of the term.

These loans are offered by most Banks, Savings and Loans, Mortgage Bankers, and mortgage brokers.  They are easily saleable since they meet specific and well established standards for credit, income, and property valuation.  Because of this, they are also usually the lowest rates in the industry.

See Also:

Adjustable Rate Mortgages

Fixed / Adjustable Hybrids

Mortgage Terms Glossary

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