Conventional Loans in Florida, Structured Before You Choose a Lender

620 is a common minimum for many conforming conventional loans, but approval and pricing depend on the full file, automated underwriting, lender overlays, credit history, LTV, and occupancy. 740+ typically unlocks the strongest rate and PMI tiers. Below 620, conforming options narrow quickly.

Often yes. 660 is above the 620 floor, so conforming conventional is available — but pricing and PMI are tighter than at 700+. Compare the conventional quote against FHA at the same credit; FHA sometimes wins below 700.

Yes. 700 is solidly inside conventional's pricing-friendly range. PMI is reasonable, rate pricing is competitive, and most lenders treat 700 as a clean approval credit. 720 and 740 tiers price even better.

740+ unlocks the strongest conventional pricing and lowest PMI tiers. You're at or above the LLPA breakpoint that historically separates 'good' from 'excellent' on Fannie/Freddie's pricing matrix. Above 760, gains are smaller but still real.

Materially. Fannie/Freddie LLPA matrices price by credit-score bracket and LTV. Moving from 620 to 740 can drop the rate by half a point or more (or convert a point cost into a credit), and it cuts PMI substantially.

The 'lower middle FICO' across all borrowers. For each borrower, the lender pulls all three bureau scores (Equifax, Experian, TransUnion) and takes the middle. Across multiple borrowers, the lender uses the lower of those middles as the qualifying score.

Below 620, conforming conventional usually does not work — that's a hard floor for most lenders. FHA is generally more flexible at lower credit. Some non-QM and portfolio products accept lower credit at higher rate and down payment.

Sometimes — conventional is stricter on collections than FHA. Fannie/Freddie may require collections above a balance threshold to be paid off before closing, and recent collections trigger more underwriting scrutiny. Medical collections often get gentler treatment than non-medical.

Yes, after a waiting period: Chapter 7 typically 4 years from discharge, Chapter 13 typically 2 years from discharge or 4 years from dismissal. Documented extenuating circumstances may shorten the window (Ch7 to 2 years). FHA and VA seasoning windows are shorter than conventional.

Yes, after a 7-year wait from the foreclosure sale date for standard conventional, or 3 years with documented extenuating circumstances and 90% max LTV. Short sale and deed-in-lieu have shorter waits (typically 4 years).

As little as 3% down for eligible primary-residence borrowers (HomeReady, Home Possible, and standard 97% LTV programs). 5% down is common on standard conventional. 10% on second homes. 15-25% on investment properties. 20% down avoids monthly PMI.

No. 20% down avoids monthly PMI, but it is not required. Conventional loans are widely available at 3%, 5%, 10%, and 15% down. The 20% myth comes from the PMI threshold — it's optional efficiency, not a requirement.

Yes — through HomeReady (Fannie Mae), Home Possible (Freddie Mac), or standard 97% LTV conventional. Income limits may apply on HomeReady and Home Possible. PMI applies because LTV is above 80%, but PMI on these programs is often lower than standard conventional.

HomeReady is Fannie Mae's affordable lending program. It allows 3% down, accepts borrowers at or below area median income (AMI), offers reduced PMI factors, and includes flexible income features (boarder income, non-occupant co-borrower, gift funds). Borrowers must complete a homebuyer education course.

Home Possible is Freddie Mac's affordable lending program — Fannie Mae's HomeReady equivalent. It allows 3% down for borrowers at or below area median income, offers reduced PMI, and includes flexible features for first-time and lower-income buyers.

Yes. Conventional allows gift funds from eligible donors (family member, fiancé, domestic partner) for the entire down payment on primary residences and second homes. Investment properties have stricter rules. A signed gift letter and source documentation from the donor are required.

Yes, in defined cases. Many state and county down-payment-assistance (DPA) programs work with HomeReady, Home Possible, and standard conventional. Some DPA programs are FHA-only — confirm program eligibility before structuring. Florida has several DPA options for first-time buyers.

Generally no. Conventional requires at least 3% down for primary residences. The closest to zero down on conventional is structuring with 100% gift funds (still requires 3% down minimum) or using DPA to fund the 3%. VA is the standard zero-down path for eligible veterans.

Any deposit that's unusual relative to the borrower's documented income gets flagged for sourcing. Standard threshold: deposits over 50% of one month's gross income trigger documentation requirements. The deposit must be sourced (where it came from), and gift funds need a gift letter.

Yes. A 401(k) loan against your own balance is allowed and does not count as new debt for DTI under Fannie/Freddie rules (the repayment is treated as a contribution, not a debt). A 401(k) withdrawal triggers tax consequences — talk to a CPA before pulling.

Often yes. Standard conventional usually wants 1-6 months of housing-payment reserves depending on credit, DTI, and property type. Multi-financed-property borrowers and investment-property files require more (often 6 months on the subject property + reserves on each additional financed property).

Not by Fannie/Freddie — earnest money is a contract term between buyer and seller, not a conventional loan requirement. Florida purchase contracts almost always include earnest money to make the offer credible. Source of the earnest money has to be documented for underwriting.

Florida conventional purchase closing costs commonly run 2-4% of the purchase price — title and escrow fees, lender fees, recording, Florida doc stamps, intangible tax on the mortgage, prepaid taxes and insurance, escrow setup, and per-diem interest. Seller credits and lender credits offset many lines.

Conventional seller-concession caps depend on occupancy and LTV. Primary residence and second home: 3% of price at >90% LTV; 6% at 75.01-90% LTV; 9% at ≤75% LTV. Investment property: 2% regardless of LTV. Concessions cover closing costs and prepaids — not down payment.

Lender credits buy down the buyer's closing costs in exchange for a slightly higher rate. They show up on the Loan Estimate as a negative number on the lender side. Useful when cash to close is the binding constraint and the borrower expects to refinance or sell within a few years.

Depends on the hold period. Each point is roughly 1% of the loan amount upfront and typically buys 0.25% lower rate (varies by day and lender). Break-even is the upfront cost divided by the monthly P&I savings. Long holds favor points; short holds favor lender credits.

Cash to close = down payment + closing costs + prepaids + escrow setup, less seller credits, lender credits, and earnest money already paid. On a typical Florida conventional purchase with 5% down, plan for 7-10% of the purchase price total — earnest money already paid counts toward that.

Generally not on a conventional purchase — the loan amount is capped at the lower of contract price or appraised value, so closing costs don't roll into the base loan. On a refinance, closing costs CAN be rolled into the new loan amount within program LTV caps.

PMI is private mortgage insurance — a monthly (or upfront, or split, or lender-paid) charge that conventional loans require when the down payment is less than 20%. PMI protects the lender against default. Cost varies by credit score, LTV, coverage, and property type. Above 80% LTV at closing.

Two main paths: 1) automatic cancellation at 78% LTV based on the original loan schedule; 2) borrower-requested cancellation at 80% LTV based on either original value or current appraised value. A new appraisal showing 80%+ equity (commonly after 2-5 years) can accelerate removal. Subject to servicer rules.

Monthly PMI typically runs 0.3% to 1.5% of the loan amount per year (annualized), depending on credit score, LTV, coverage, and property type. On a $400k loan, that's roughly $100-500/month. Stronger credit and lower LTV both cut PMI materially.

PMI (conventional) is generally removable. FHA MIP usually is not. PMI is subject to automatic termination commonly tied to 78% of original value and borrower-requested cancellation commonly around 80% LTV — both subject to servicer rules, payment history, and HPA. FHA MIP stays for the life of most loans originated after 2013. PMI cost varies by credit; FHA MIP is the same regardless of credit score.

LPMI is a conventional pricing structure where the lender 'pays' the PMI by raising the borrower's interest rate. The borrower has no monthly PMI line item, but the rate is permanently higher and LPMI cannot be canceled later — even when the loan reaches 80% LTV.

Single-premium PMI is paid upfront in cash at closing instead of monthly. It eliminates the monthly PMI charge for the life of the loan. The upfront premium is a percentage of the loan amount (varies by credit/LTV), and seller credits or lender credits can sometimes cover it.

Materially. PMI providers tier their rates by credit score and LTV. The difference between 680 and 760 PMI on the same LTV can be 50-70%. Improving the score before locking can save real money — sometimes more than improving the rate would.

PMI tax deductibility has changed multiple times by Congress. The deduction has been extended in some years and expired in others. Confirm the current tax year's rules with a CPA — this is general information, not tax advice.

Whenever the LTV at closing exceeds 80% (down payment less than 20% on a purchase, or remaining balance above 80% of value on a refinance). PMI is required regardless of credit score — strong credit just makes it cheaper, not optional.

Depends on credit, down payment, and hold period. Conventional usually wins for borrowers with 700+ credit and 5%+ down, especially over a long hold (PMI cancels; FHA MIP doesn't). FHA usually wins for borrowers with weaker credit (under 680), fresh credit events, or who need maximum DTI flexibility.

For eligible veterans, VA usually wins on cost: zero down available, no monthly mortgage insurance, lower funding fee for first use, exempt for many disabled veterans. Conventional may win at very strong credit with 20%+ down where PMI is gone and pricing is most competitive.

Often yes, in competitive markets. Conventional has the perception of fewer property-condition flags and faster closings. The reality varies by file. A clean, well-structured FHA offer with a tight financing contingency competes effectively with conventional on most properties.

For 2026, the FHFA one-unit baseline conforming loan limit is $832,750 — that's the standard cap for most Florida counties. High-cost counties go up to $1,249,125. Above the applicable conforming limit, the loan moves to jumbo or nonconforming.

Above the conforming limit, the loan moves to jumbo (a non-agency loan) unless the property is in a high-cost county where the conforming limit goes up to $1,249,125 in 2026. Jumbo has different qualifying rules, often stricter credit and reserves, and pricing varies by lender.

FHFA designates high-cost counties where the local conforming loan limit is higher than the baseline. For 2026, the high-cost ceiling is $1,249,125 — counties with median home prices above thresholds qualify for higher limits, scaling up to that ceiling.

Multi-unit conforming loan limits scale up from the 1-unit baseline. The 2026 one-unit baseline is $832,750; 2-, 3-, and 4-unit limits are progressively higher. Verify exact figures against the current FHFA/Fannie/Freddie tables before structuring offers.

Conforming conventional follows Fannie/Freddie rules and stays at or below the FHFA county limit. Jumbo is above the conforming limit and follows lender-specific or private investor rules. Jumbo usually requires stronger credit, more reserves, and larger down payment.

No. The loan limit is a structural cap on conforming financing — not a measure of what you can afford. Income, credit, debts, taxes, insurance, HOA, PMI, and reserves all decide affordability. The limit and your max-approved loan amount are separate numbers.

Usually yes. Most conventional purchases and refinances require a full appraisal by a licensed appraiser. Appraisal waivers (also called PIWs) are sometimes offered by Fannie's DU or Freddie's LP on lower-LTV files with strong AVM data, but waivers aren't guaranteed.

Generally yes. Conventional appraisals focus on value and basic collateral acceptability — fewer property-condition flags than FHA's Minimum Property Requirements. Conventional appraisers note major issues but usually don't require pre-closing repairs the way FHA does for paint, roof life, exposed wiring, and similar items.

Three options: 1) renegotiate the contract price down to the appraised value; 2) bring cash to cover the gap above the appraised value; 3) request a Reconsideration of Value (ROV) with new supporting comps. The contract usually contains an appraisal contingency that lets the buyer walk if they can't bridge the gap.

Major structural defects (foundation, framing, water intrusion), safety hazards that the lender flags, properties with visible damage that affects collateral value, or values that come in materially below contract price. Conventional doesn't fail appraisals over cosmetic issues the way FHA might.

Conventional doesn't require a home inspection — only a conventional appraisal. A buyer-paid home inspection is strongly recommended on top of the appraisal because the appraiser is not a licensed inspector and only checks collateral acceptability.

Conventional doesn't blanket-require a termite inspection nationally, but Florida contracts and lender overlays often require a wood-destroying-organism (WDO) report on conventional purchases. Florida's termite activity makes the inspection a practical requirement on most files.

Sometimes. Standard conventional accepts properties in 'as-is' livable condition. Major repair needs (roof, foundation, systems) may need to be cured before closing, similar to FHA. For larger renovation projects, Fannie's HomeStyle Renovation loan or Freddie's CHOICERenovation wraps purchase + renovation into one loan.

Fannie Mae's HomeStyle Renovation loan finances a home purchase plus repair/renovation costs in a single conventional first mortgage. The loan is based on the home's as-completed value (after renovations). It allows up to 75-95% LTV on as-completed value depending on occupancy.

Yes, but the project must be warrantable — meeting Fannie Mae or Freddie Mac project-level rules around owner-occupancy, insurance, reserves, litigation, and budget. Many Florida condo projects are warrantable; some are not, especially older buildings or projects affected by recent insurance and reserve law changes.

A warrantable condo is a project that meets Fannie Mae or Freddie Mac project-level rules — making the loan eligible for sale to those agencies. Non-warrantable condos fail one or more of those rules, requiring portfolio or non-QM financing (often at higher rate and down payment).

Often yes. Florida's 2022 condo law (SB 4-D) and subsequent updates require milestone structural inspections and full funded reserves on older buildings. Projects with deferred maintenance or pending assessments now face more financing friction. Newer projects and well-managed older ones still finance smoothly.

Same minimums as standard conventional: 3% on HomeReady/Home Possible if income-eligible, 5% on standard conventional, 10% on second-home condos, 15-25% on investment-property condos. PMI applies above 80% LTV regardless. Condo LLPAs may apply at higher LTVs.

Yes. Conventional finances investment-property condos, but down payment minimums are higher (typically 25% on a 1-unit condo investment), pricing is worse due to investment + condo LLPAs, and the condo project must be warrantable. Florida coastal markets have additional friction.

Yes, with significant rules. Fannie's MH Advantage and Freddie's CHOICEHome programs finance certain manufactured homes that meet specific design and titling standards (real property, not personal property). Standard manufactured homes can also be financed but with stricter LTV and pricing. Florida titling has specific requirements.

Yes. Conventional finances 2-, 3-, and 4-unit properties for primary residence (owner-occupied) and investment. Owner-occupied multi-unit can have lower down payment minimums than pure investment. Rental income from non-owner-occupied units may count toward qualifying.

Yes. Conventional finances rural properties as long as the appraisal supports value with comparable sales and the property is residential (not agricultural-use-only). USDA loans serve eligible rural areas with no down payment, but conventional handles rural primary residences, second homes, and investment too.

Yes, on a primary-residence conventional loan. Renting rooms doesn't violate the primary-residence requirement as long as the borrower lives in the home. Long-term roommate arrangements are common. Short-term rental (Airbnb, VRBO) on the entire home is a different question — that may shift the property toward investment-property classification.

Conventional approval is based on credit (typically 620+ minimum), DTI (commonly capped 45-50% with overlays), documented stable income, sourced and seasoned assets for the down payment and reserves, an acceptable property and appraisal, and a loan amount within the conforming limit. Lender overlays often tighten Fannie/Freddie's published rules.

Common stoppers: credit score below the lender's floor (commonly 620), recent late payments or collections, DTI too high without compensating factors, unstable or unverifiable income, unsourced large deposits, condo project not warrantable, low appraisal, loan amount over the conforming limit without jumbo qualification, property condition issues, and lender overlays tighter than Fannie/Freddie.

Generally yes — Fannie Mae and Freddie Mac want a stable two-year employment history with documentable income. Same-field job changes are usually fine. School, training, and military service can count toward the two years. Brand-new self-employment usually needs two years of business returns to qualify.

No — conventional is the main path for second homes, vacation properties, and investment properties, in addition to primary residences. Each occupancy type has its own down payment, pricing, and reserve rules. Primary-residence conventional gets the best pricing.

Yes. Conventional loans accept co-borrowers — typically a spouse, but non-spouse co-borrowers are also allowed. Each co-borrower's credit, income, and debts are evaluated. The lower middle FICO score across all borrowers is usually the qualifying score.

Fannie Mae's automated underwriting commonly accepts DTI up to 50%, with strong files clearing higher. Freddie Mac's LP often runs similar. Lender overlays usually cap lower — 45% is common, 50% is the practical ceiling for many channels. Manual underwriting is much stricter (often 36-45%).

Add the new conventional housing payment (P&I + property taxes + insurance + PMI + HOA + CDD if any) plus credit card minimums, car loans, student loans, child support, and alimony. Divide by gross monthly income. Don't include normal living expenses. Front-end DTI uses just housing; back-end uses the full debt stack.

Fannie Mae uses the actual reported payment from the credit report, or 1% of the outstanding balance if the credit report shows $0 (deferred). Freddie Mac uses the actual payment if reported, or 0.5% of the outstanding balance for deferred or income-driven loans. The difference matters on tight files.

Conventional doesn't have a published front-end-only DTI cap the way FHA does — automated underwriting evaluates the housing-to-income ratio in context of the full file (back-end DTI, reserves, credit). Common practical guideposts cluster around 28-36% front-end, but strong files can clear higher.

It depends on income, debts, credit, down payment, taxes, insurance, HOA, PMI, and the property itself. A real pre-approval models all of those. Generic affordability calculators miss file-specific factors and Florida payment math.

Yes. Conventional accepts self-employment income with two years of personal and business tax returns showing stable or improving net income. Year-over-year declines reduce qualifying income; less than two years of self-employment rarely qualifies on conforming.

Often yes, with a documented two-year history. Overtime, bonus, and commission income are typically averaged over the most recent two years. Year-to-date trend matters — declining year-over-year usually means using the lower number, not the average.

Yes, with a documented two-year history at the same job (or in the same line of work). Part-time income at a stable employer is treated similarly to base income, usually averaged. New part-time at a second job has a tougher path.

Yes, but 1099 contractor income is treated as self-employment. Two years of personal returns plus year-to-date documentation are typically required. Pure 1099 with under two years of history usually doesn't qualify on standard conforming conventional.

Yes. SSDI, VA disability, and private disability income are accepted as qualifying income with proper documentation. Non-taxable disability income may be grossed up by an underwriting factor (commonly 15-25%) to compare with taxable income — gross-up rules vary by lender.

Yes. Both are accepted as stable qualifying income with documentation. Social Security retirement, SSDI, and pension income don't have a fixed end date in most cases, so likelihood-of-continuance is generally not an issue. Non-taxable portions can sometimes be grossed up.

Yes, both directions. Court-ordered support that you receive can count as qualifying income with documented payment history (typically 6-12 months) and 3+ years of remaining duration. Support that you pay counts as a recurring debt and reduces DTI room.

For self-employed and 1099 income, yes — typically two years of personal and business returns. For salaried W-2 borrowers, conventional often runs without tax returns when automated underwriting waives them, though lender overlays may still ask.

Rates change daily and depend on credit, LTV, occupancy, property type, loan amount, lock period, and points/credits. There's no single 'conventional rate' that applies to everyone — get a real Loan Estimate to compare.

Compare full Loan Estimates from at least two lenders on the same day — rates change daily. Look at note rate, APR, total points/credits, lender fees, and total cash to close together, not the rate alone. Brokers compare across multiple wholesale lenders; retail banks quote their own pricing.

Sometimes. A mortgage broker can compare conventional pricing across multiple wholesale lenders, while a retail bank quotes its own pricing. Wholesale channels often produce competitive quotes, but no broker is universally cheapest — compare actual Loan Estimates.

30-year has a lower payment but more total interest. 15-year cuts total interest dramatically but the monthly payment is materially higher. Most borrowers choose 30-year for cash flow and put extra principal toward the loan voluntarily. The right choice depends on your cash-flow plan and other goals.

Most borrowers lock when the contract is accepted and the file is moving toward closing — typically 30-60 day locks are standard for purchases. Locking too early adds extension cost if the file delays; locking too late leaves the rate exposed to market moves.

Sometimes. Some lenders offer a one-time float-down option after lock if rates drop by a defined threshold (commonly 0.25% lower). Float-downs typically have a fee or restricted timing. Most retail bank programs don't offer float-down; broker channels vary by wholesale lender.

LLPAs (Loan-Level Price Adjustments) are price adjustments Fannie Mae and Freddie Mac apply based on credit score, LTV, occupancy, property type, and loan purpose. They show up as points or rate adjustments on the rate sheet and can swing pricing by 1-2%+ in equivalent rate.

Fannie/Freddie LLPA matrices have credit-score columns: 620-639, 640-659, 660-679, 680-699, 700-719, 720-739, 740-759, 760-779, 780+. Each bracket up reduces the LLPA. Moving from 700 to 740 can save 0.5-1% in points equivalent.

Yes, materially. Investment property and second home each hit their own LLPAs on top of credit/LTV adjustments. Investment property LLPAs can add 2-5%+ in points equivalent compared to primary residence at the same credit and LTV.

Yes, on conforming conventional loans above 60% LTV. The condo LLPA varies by LTV — typically 0.25-0.75 points at higher LTVs. The LLPA reflects the additional risk of condo collateral (project-level concerns) compared to single-family.

Yes. Cash-out refinances carry their own LLPA on top of credit and LTV adjustments. The adjustment scales with LTV — 80% LTV cash-out hits a larger LLPA than 60% LTV cash-out. Cash-out refinance pricing is materially worse than rate-and-term refinance.

Materially. Florida county millage rates and assessment basis determine the buyer's monthly tax escrow, which counts in the housing payment for DTI. A property's tax can reset on transfer (Save Our Homes doesn't transfer to new owners), so the buyer's projected tax is often higher than the seller's current tax.

Heavily. Florida insurance premiums have moved fast and can be the surprise that pushes a conventional file's DTI past acceptable levels. Roof age, wind mitigation, 4-point inspection on older homes, and flood zone designation all affect both pricing and carrier acceptance.

Yes, when the property is in a FEMA-designated Special Flood Hazard Area (SFHA, Zones A and V). That's a federal rule that applies to all federally-related mortgages, including conventional. Outside the SFHA, flood insurance is optional but often a smart idea in coastal Florida.

Yes. Orlando is a top conventional volume market in Florida — Lake Nona, Sanford, Lake Mary, Kissimmee, and broader Central Florida communities all see active conventional purchase and refinance volume. Standard 2026 conforming limits apply across most Orange, Seminole, Osceola, and Lake County properties.

Yes. Out-of-state borrowers regularly purchase Florida properties — second homes, investment, or future-primary purchases. The lender works the file across states, the appraisal happens locally in Florida, and the closing happens via local title company or with remote-online-notarization (RON) where the title underwriter accepts it.

Submit a full loan application with credit pull, two months of pay stubs, two years of W-2s and tax returns, two months of bank statements, government ID, and authorization for the lender to verify everything. The lender runs automated underwriting and issues a pre-approval letter showing the qualifying loan amount.

Pre-qualified is a quick estimate based on what the borrower says (no documentation, no credit pull). Pre-approved is a full review with credit pull, documented income/assets, and an underwriting decision. Sellers and listing agents take pre-approval far more seriously than pre-qualification.

30-45 days from a clean pre-approval and accepted contract is typical for a Florida conventional purchase. Cash-out refinance, jumbo, or condo files can run longer. Appraisal turn time, condo project review, and underwriter conditions are the common timeline movers.

Real pre-approval letter from a named lender (not a generic prequal), reasonable earnest money, a tight financing contingency, and a short or no appraisal contingency where the file supports it. Brokers and lenders with proven track records reassure listing agents on closing certainty.

Three main types: 1) rate-and-term — change rate or term, no cash out; 2) cash-out — pull equity at closing; 3) limited cash-out — small amount of borrower funds back at closing for closing-cost reimbursement. Each has different LTV caps, pricing, and seasoning rules.

A conventional cash-out refinance pays off the existing mortgage and gives the borrower additional cash from accumulated equity. Maximum LTV is typically 80% on a 1-unit primary residence, lower on multi-unit and investment. Pricing carries cash-out LLPAs that have tightened in recent years.

Yes. If property value has risen enough that the new appraisal shows 80%+ equity, refinancing into a new conventional loan eliminates PMI from day one. Rate has to be reasonable — sometimes the higher new rate offsets the PMI savings, sometimes it doesn't.

Yes. The most common reason: removing FHA's lifelong MIP. If the loan has appreciated enough that the new conventional LTV is below 80%, refinancing eliminates the monthly MI entirely. If between 80-97% LTV, the borrower trades MIP for PMI but still benefits if PMI is cheaper at the borrower's credit score.

For rate-and-term: typically no formal seasoning, but the new lender may want 6+ months of payment history. For cash-out: 6 months minimum on most files, longer for properties acquired through inheritance or recent purchase. The rule applies on the borrower side (payment history) and the property side (recent acquisition).

Sometimes. Fannie's DU and Freddie's LP issue appraisal waivers on certain low-LTV refinances where the agency's automated valuation has high confidence. Waivers are more common on rate-and-term than cash-out. Higher-LTV refinances rarely get waivers.

Yes, within the program's max LTV. Rate-and-term refinance allows closing costs to be added to the new loan amount up to the conforming LTV cap. Cash-out has tighter LTV caps that may limit how much can be financed alongside the cash withdrawal.

Total closing costs divided by the monthly payment savings = number of months to break even. If you'll keep the loan past that point, the refinance pays off. If you'll sell or refinance again sooner, it doesn't. A 0.5% rate drop on a $400k loan typically saves $100-150/month — break-even on $5k closing costs is 33-50 months.

No formal 'streamline' product like FHA or VA, but Fannie's RefiNow and Freddie's Refi Possible programs serve lower-income borrowers with reduced documentation and credit requirements. Standard rate-and-term conventional refinance is full-doc.

A conventional loan is a mortgage that is not insured or guaranteed by a government agency (FHA, VA, USDA). Most conventional loans follow Fannie Mae or Freddie Mac guidelines and are called 'conforming.' They typically reward stronger credit and larger down payments with better pricing.

Conforming loans meet Fannie Mae or Freddie Mac size and underwriting rules — they're eligible for sale to those agencies. Nonconforming loans (jumbo, portfolio, non-QM) don't fit those rules. Most conventional loans are conforming.

Yes. Fannie Mae and Freddie Mac are the two government-sponsored enterprises that buy conforming conventional loans on the secondary market. When a lender says 'Fannie Mae loan' they typically mean a conforming conventional loan that follows Fannie's selling guide.

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.

No. That's the defining feature. FHA, VA, and USDA are government-backed loans; conventional is everything that is not. Conventional loans are funded by private lenders and either kept by the lender or sold into the conforming or jumbo secondary markets.

No. Conventional loans are widely used by first-time buyers — Fannie Mae's HomeReady and Freddie Mac's Home Possible programs are specifically designed for first-time and lower-income buyers with as little as 3% down and reduced PMI.

Fannie Mae allows borrowers to finance up to 10 properties total (primary + second + investment). Freddie Mac caps lower in some programs. Lender overlays may tighten further — many lenders cap at 4-6 financed properties on a single borrower.

Generally no. Most conventional loans contain a 'due-on-sale' clause that makes the loan immediately payable if the property changes hands. Some adjustable-rate conventional loans are technically assumable, and some servicer-by-servicer exceptions exist for certain transfers (death, divorce). FHA and VA are the truly assumable programs.

Yes — conventional is the standard mortgage path for investment properties. Down payment is typically 15% on a 1-unit and 25% on 2-4 unit investments. Rate is materially higher than primary residence due to LLPAs. Rental income usually counts toward qualifying at 75% of market or lease rent.

Typically 15% minimum on 1-unit investment, 25% on 2-4 unit investment. Some lender programs accept 20% on 1-unit. Larger down payments improve pricing through LLPAs and may be the deciding factor in cash-flow math.

Yes, with documentation. Existing rental income from another property uses 75% of the lease amount (or market rent if no lease). Income from the subject investment property uses 75% of the projected rent in most cases. New investors without 2-year management history have stricter rules.

Tricky. Fannie Mae and Freddie Mac generally treat short-term/Airbnb rental income as projected income that requires 2 years of personal tax returns showing the income on Schedule E. Some non-QM lenders accept Airbnb income with reduced documentation. Regular long-term rental income is easier to qualify.

Because Fannie/Freddie LLPAs add a material rate or points adjustment for non-owner-occupied properties. Combined with credit and LTV LLPAs, investment-property pricing can be 0.75-1.5%+ higher than the same borrower's primary-residence rate. The agencies price for the higher default risk on investments.

Typically 6 months of full housing payment (PITI) on the subject investment property at minimum, plus 2 months on each of the borrower's other financed properties. Borrowers with 5+ financed properties face stricter reserve requirements per Fannie's multi-financed-property rule.

Yes. Conventional is the standard path for second homes (vacation properties). Minimum down payment is typically 10%, occupancy intent matters, and the property must be a one-unit suitable for year-round occupancy. Pricing is between primary residence and investment property.

Second home is for borrower's personal use; investment property is for renting to others. Second home gets 10% minimum down with modest LLPAs. Investment requires 15-25% down with much heavier LLPAs. Lying about occupancy intent (calling an investment a second home) is mortgage fraud.

Yes, modestly. Second-home LLPAs add a smaller adjustment than investment-property LLPAs. The rate is typically 0.25-0.5% higher than the same borrower's primary-residence rate at the same credit/LTV. Pricing improves with stronger credit and lower LTV.