Conventional mortgages are loans that are not guaranteed or insured by any government agency, such as the Department of Veterans Affairs (VA) or the Federal Housing Administration (FHA). VA loans are designed for Veterans, active-duty military personnel, and, in some cases, their spouses and can have a lower down payment. As a part of the Department of Housing and Urban Development, the FHA insures residential mortgage loans made by private lenders, like Sunshine Financial Group.
Conventional mortgages loans adhere to Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) guidelines and can be conforming or non-conforming. Fannie Mae is a corporation created by the federal government that buys and sells conventional mortgages. It sets the maximum loan amount and requirements for borrowers. Chartered by Congress in 1970, Freddie Mac was established to strengthen and support the country’s residential mortgage market and provide more opportunities for homeownership.