Mortgage loans that are not backed by a government agency are known as conventional loans. There are 2 types of conventional loans:- Conforming conventional loans- Non-conforming conventional loans (jumbo loans) Conventional loans are available as fixed rate mortgages, which have the same interest rate over the entire term of the mortgage, or adjustable rate mortgages ("ARMs"), which have interest rates that change over time.
Conforming Conventional Loans If the loan is a conforming conventional loan, it will follow lending guidelines provided by either Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Corporation). These government-sponsored enterprises buy loans from lenders that follow their guidelines, and they re-sell these loans to other investors. There are annual loan limits for conventional loans - in 2026, the baseline limit is $832,750 for single-family homes, but this limit can be higher in high-cost counties. In Colorado, for example, Douglas County, Arapahoe County, Jefferson County, and Denver County all have conforming limits of $862,500 for single-family homes. Factors that Fannie Mae and Freddie Mac look at before approving you for a loan are:- Credit rating- Employment history- Debt-to-income ("DTI") ratio- Loan-to-value ("LTV") of the house You can find more details at:
Non-conforming Conventional Loans (Jumbo Loans) Non-conforming conventional loans, also known as jumbo loans, are loans that are higher than the conforming loan limits. Due to the higher risk with jumbo loans, there are stricter guidelines to qualify for a loan and the interest rates are sometimes a little higher. Sometimes two appraisals are required with jumbo loans to verify the home’s value. Typically mortgage insurance is not required.
FHA Loans An FHA Loan is backed by the government and insured by the Federal Housing Administration. FHA loans generally have more lenient qualification requirements because of this insurance, which means it can be a good option for those who need lower down payments (only 3.5%), have higher DTI ratios, or have lower credit scores. FHA loans also have lower interest rates and potentially cheaper monthly mortgage insurance than conventional loans. The maximum loan amount for an FHA loan varies depending on the county where you live. In Colorado, for example, Douglas County, Arapahoe County, Jefferson County, and Denver County all have conforming limits of $862,500 for single-family homes in 2026. FHA loans are only available for your primary residence. An FHA streamline program makes it easy for you to refinance from an existing FHA loan into a new FHA loan with a lower interest rate. Less documentation is needed for this program, which also has lower costs. You can find more details at:
VA Loans A VA (Veterans Affairs) loan is backed by the U.S. Department of Veterans Affairs. To qualify for this loan, you must be a qualifying veteran, the unmarried widow of a veteran, a Public Health Service Officer, or an active-duty serviceman. VA loans have easier qualification requirements and lower interest rates than conventional loans, plus you can pay $0 down without monthly mortgage insurance. As of 2020, if you have full entitlement, you don’t have a VA loan limit. The VA has a streamline refinance program that make it easy to refinance from an existing VA loan into a new VA loan with a lower interest rate. Less documentation is needed for this program, which also has lower costs. This option is for veterans who are refinancing their original VA mortgage and who have utilized their original eligibility. You can find more details at:
Non-qualified mortgages don't meet the Consumer Financial Protection Bureau requirements for qualified mortgages (which include conventional and government loans). Non-QM mortgages offer flexible guidelines to help borrowers and provide alternatives to qualified mortgages. For example, this flexibility allows lenders to use an alternative income calculation that can show higher income, or to accept borrowers who recently had a major credit event like bankruptcy or foreclosure. Compared to qualified mortgages, Non-QM loans typically have higher down payment requirements and higher interest rates and fees to compensate for added risk. Examples of Non-QM loans include: Bank Statement Loan -For business owners -Calculate income from bank statements instead of tax returns Debt Service Coverage Ratio ("DSCR") Loan -For investors -Qualify based on rental income of subject property -DSCR = monthly rent / mortgage payment including escrow and HOA Non-warrantable Condo Loan -For buying a condo that is not approved with a conventional or FHA loan Fix and Flip Loan -For purchasing a house to renovate and resell quickly
