Pennsylvania Home Buyer

Conventional loan down payment requirements


In 1938, the Federal National Mortgage Association, also known as Fannie Mae, was created with FDR's new deal legislation to kick start the failing housing market during the great depression. In 1970, Congress created the Federal Home Loan Mortgage Corporation, known as Freddie Mac. Freddie Mac and Fannie Mae do not originate mortgages, but use approved mortgage lenders to provide home loan financing on their behalf

Fannie Mae and Freddie Mac mortgages are known as conventional or conforming loans. In short, these loans "conform" to the Fannie and Freddie underwriting guidelines. Chances are, if the loan is not VA, USDA, or FHA, it's a Fannie Mae or Freddie Mac loan.

The are no sales price or income limits with the Fannie/Freddie loans, however, there are maximum mortgage limits based on the county that the home is located at. It should be noted that the maximum loan limit increases with the number of living units (i.e. single family home or condo, duplex, triplex, 4-unit).

Confused emoticonCan investors get a conventional loan? - Yes

Do you have to put 20 down for a conforming loan - No

What is the minimum down payment on a conventional loan?

Low down payment of 5%, however, both Fannie Mae and Freddie Mac provide financing for low to moderate borrowers through their My Community and Home Possible mortgage programs. These programs still require a 5% down payment; however, 2% of the down payment can be "gifted" by a family relative.

Conforming loan terms: 10, 15, 20, 25 and 30 Years

Maximum amount for a conventional loan - The maximum loan amount will vary by US county and the number of living units. Here are the maximum mortgage amounts for most US counties. Again, the loan limit will vary. There is no maximum sales price, just a maximum mortgage amount. The maximum sales price below represents the minimum down payment of 5%. For example: Sales price ($438,947) - down payment (5%) = mortgage amount ($417,000). Loans that exceed the mortgage limit for the respective US county are known as "Jumbo Loans".

# of Units Maximum Loan Amount Maximum Sales Price with a 5% down payment
1 - Unit = $417,000 $438,947
2 - Unit = $533,850 $561,947
3 - Unit = $645,300 $679,263
4 - Unit = $801,950 $844,158

Is there a conforming loan funding fee - No

PMI (Private Mortgage Insurance) - Monthly mortgage insurance is required for loans with less than 20% down payment.

Who qualifies for a conventional loan? - US Citizens or permanent resident aliens (with proof of lawful permanent residency) - all borrowers must have a social security number and must legally live and work in the U.S.

Conventional loan occupancy requirements - Primary residence only (no investors) must be occupied within 60 days of closing. Non-occupant co-borrowers (co signers) do not have to occupy the residence.

Conforming loan income limits - No Income limits

Conventional credit score requirements - Loan Applicants must have a credit history that indicates a reasonable willingness to meet their obligations and an ability to repay their debts.

Conventional debt to income ratio - The maximum debt to income ratios is 28/36%; however, there is the possibility for exceptions.

GIFTS - Gifts or grants are permitted from relatives or friends, charitable organizations, municipality or non-profit organization.

Maximum seller contribution conventional loan  - The seller can pay the buyer's closing, prepaid & escrow costs based on the down payment percentage. No cash back to the buyer is permitted at closing as a result of the seller assist. The seller is not obligated to pay the buyer's closing costs. See seller assist

Multiple Property Ownership - Borrowers may retain their current home.

Can a conventional loan be an FHA loan? No, they are two different types of loans. Learn about FHA loans







How much does it cost to buy a house in Pennsylvania?

Use the PA mortgage calculator to estimate the down payment, closing costs and monthly payment for FHA, VA, USDA & conventional loans.Closing cost calculator


First time home buyer classes listed by county



Learn about Pennsylvania's home buying programs. Read more

phfa logo