Conventional Loan Vs FHA Loan

  Conventional Loan Vs  FHA Loan

Here is the difference between  Conventional Loan Vs  FHA Loan and we are comparing with 5 points of  Conventional Loan Vs  FHA Loan in a very simple and easy way 

Cover Image of Conventional Loan Vs  FHA Loan
 Cover Image of Conventional Loan Vs  FHA Loan

 Conventional Loan

              FHA Loan

1. The most common type of mortgage, conventional loans, are originated and serviced by private banks, credit unions, and other financial institutions.

1.  FHA stands for Federal Housing Administration (FHA)

 2. They are not backed by any government agency.

 2. An FHA loan is a type of mortgage that’s backed by the Federal Housing Administration (FHA)

 3. Conventional mortgages are considered “conforming” loans, meaning they conform to loan limits set by the Federal Housing Finance Agency (FHFA).

 3. These loans are designed for prospective homeowners who wouldn’t otherwise qualify for an affordable conventional loan, especially first-time homebuyers, and offer more relaxed down payment and credit score requirements

 4. They also meet specific standards set in place by the government-sponsored enterprises known as Fannie Mae and Freddie Mac, which purchase and guarantee these loans, and then sell them as mortgage-backed securities to investors.

 4. They can only be used to finance primary residences, not investment or vacation properties.

5.  Conventional loans that don’t meet these guidelines are known as nonconforming loans


5. Insures loans that are made by individual, FHA-approved lenders so that they are financially protected if the borrower defaults.


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