A conventional mortgage or conventional loan is any type of homebuyer's loan that is not offered or secured by a government entity, like the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA) or the USDA Rural Housing Service, but rather available through or guaranteed by a private lender (banks, credit unions, mortgage companies) or the two government-sponsored enterprises, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
A conforming mortgage is one whose underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. Chief among those is a dollar limit, set annually by the Federal Housing Finance Agency (FHFA). Currently, in Puerto Rico, a loan must not exceed $424,100. Conventional mortgages are often the best for homebuyers who want the residence for investment purposes or as a second home; or who want to purchase a property priced over $500,000.
Non-conforming loans are mortgages that do not meet the loan limits discussed above, as well as other standards related to your credit-worthiness, financial standing, documentation status, among others. Fannie Mae cannot purchase non-conforming loans.
For a list of documents required upon closing, please click here: CHECKLIST
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