Conventional Loan Qualifications

Question 1

Maximum Debt-to-Income

Answer 1

Manually Underwritten - 28% to 36% ( Up to 45% with specific requirements)

Question 2

Minimum Down Payment

Answer 2

3% (Up to 97% LTV)

Question 3

Minimum Credit Score

Answer 3

Generally 640 FICO (but it depends and can be lower)

Question 4

Loan Limit

Answer 4

$647,200 conforming (adjusted annually)
Over this is non-conforming (Jumbo loan)

Question 5

Private Mortgage Insurance (PMI)

Answer 5

Required on conventional loans with less than 20% down

Question 6

Appraisal

Answer 6

Required unless Fannie or Freddie give an Appraisal Waiver when the loan goes through automated underwriting.

Question 7

Gift Funds

Answer 7

Allowed

Question 8

Borrowers with Bankruptcy

Answer 8

4 years from chapter 13 discharge or dismissal, 4 years from chapter 7 filing (can be 2 with special circumstances.)

Question 9

Borrowers after Foreclosure

Answer 9

7 years from foreclosure, 4 from a short sale.

Question 10

LTV requirements on cash-out refinance

Answer 10

85% maximum LTV

Question 11

Reserves

Answer 11

Usually 2 to 4 months (Determined by LP or DU)

Question 12

Seller Concessions

Answer 12

3% in most situations. Can be higher if down payment is high.

Question 13

Non-Occupying Co-Borrower

Answer 13

Not Allowed

Question 14

Assumable

Answer 14

No

Question 15

Employment History

Answer 15

2 Years