How does a conventional loan work?
An approved lender funds the loan and underwrites it against Fannie Mae or Freddie Mac guidelines. The lender pulls credit, verifies income and assets, orders an appraisal, and runs the file through automated underwriting. Once cleared, the loan closes and is typically sold to Fannie/Freddie or kept on the lender's books.
Plain-English explanation
Standard flow: 1) full pre-approval (credit pull, documented income, assets, debts); 2) shop with the pre-approval letter and write an offer; 3) lock the rate when the contract is accepted; 4) appraisal ordered; 5) underwriting clears conditions; 6) closing disclosure delivered with a 3-business-day window before closing; 7) close. Subject to Fannie/Freddie guidelines and lender overlays.
What can change the answer?
Fannie Mae and Freddie Mac guidelines, lender overlays, and your specific file (credit, income, property, occupancy) drive the actual answer.
Want the real answer for your conventional file?
Conventional guidelines are the rule. Your credit, income, DTI, PMI, LLPAs, and Florida payment math are what decide the actual answer.
More conventional questions on Basics
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review.