Worried about conventional loan requirements? Here’s the 2022 updated list!

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Conventional loan requirements for 2022 vary from lender to lender. For as low as 3% downpayment, you can qualify to take out a conventional or conforming loan, especially if your credit score goes to the 620 range. It is no wonder why conventional loans are one of the most in-demand mortgage types as they are widely available and have low rates.

Even if Fannie Mae and Freddie Mac set conventional loan guidelines, it is still reevaluated by the Federal Housing Finance Agency (FHFA) every year. The conventional loan requirements for 2022 are:

  • 43% or lower debt-to-income ratio. The debt-to-income ratio can be flexible depending on the lender and the qualifications of the borrowers.
  • 620 credit score. This is considered within the fair creditworthiness category and will give you better options when applying for loans.
  • 3% down payment for a conventional loan to help new home buyers who qualify.

Others say that you need to have a 20% down payment for a conventional loan, but if you qualify, six conventional loan choices are available in the market for you.

  1. Fannie Mae HomeReady – 3% down payment.
  2. Conventional 97 loan – 3% down payment.
  3. Freddie Mac Home Possible – 3% down payment.
  4. Conventional loan with PMI – 5%-19.99%  down payment.
  5. Piggyback loan – 10% down payment.
  6. Conventional loan with no PMI – 20% down payment.

If you have good credit but your savings are not enough to allow you a more significant down payment, then applying for conventional 97 may be a good option as it has no income limits. HomeReady and Home Possible offer the same 3% down payment requirement, but the income limits are 80% of your area’s local median income.

Conventional loan requirements depend heavily on your credit score, and it changes depending on what you can offer at the time of your application. So it is always best to talk to a loan officer to help you be abreast of what is currently available for you on the market.