Conventional Home Loans
in Arizona

Considering a Conventional Loan?

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Let’s look at some important highlights.

Conventional loan have Loan Amount limits. See the chart below for details. If you want a loan above the conventional loan limit then you will want to check out our Jumbo Loans page.

What are the Conventional Loan Limits for the state Arizona for 2024?

Single Family Duplex Tri-plex Four-plex
$766,500 $981,500 $1,186,350 $1,474,400

The Down payment minimum requirement is 3%. This helps a wide range of borrowers (first time homebuyers to long time homeowners)

Minimum credit scores are 620, that being said, conventional loan interest rates are VERY sensitive to lower credit scores

When a borrower puts less than 20% down payment (or has more than 20% equity in their home if they are doing a refinance) they will be required to pay Mortgage Insurance. Borrowers with higher credit scores will pay lower mortgage insurance. The difference in mortgage insurance payments between a borrower with a 620 credit score and a 760 credit score can be VERY large.

Conventional loans have a feature that all other loan programs do not have. They allow a borrower to do recast their mortgage after they close their loan. This is an awesome feature which allows the borrower to make a large principal payment and then have the bank recalculate their mortgage payment. Check out this page for details.

Conventional loans have the most flexible guidelines for self employed borrowers. In many cases, conventional underwriting will only require a borrower to have 1 year tax returns instead of 2 years of tax returns (for VA Loans, FHA, and Jumbo loans).

Conventional loans allow Investment and second home properties. (VA Loans and FHA loans do not allow them).

Conventional Loan appraisals are not stuck to the property like they are with VA loans and FHA loans. This is a good news especially if you have an appraisal value that is low and you want to order a second appraisal.

Conventional Loans are ideal for Manufactured Homes (VA and FHA have lots of challenging requirements for manufactured homes)

Conventional Loans are ideal for Condo properties. (VA and FHA require them to be on a pre-approved list)

Conventional loans are not assumable mortgages. VA loans are the only assumable mortgages at this time

Conventional mortgages follows guidelines set forth by Freddie Mac and Fannie Mae.

Conventional mortgages are often referred to as “Conforming Loans”. Notice the word ‘conforms’. It refers to a loan that ‘conforms’ to all the necessary criteria and guidelines. A loan that does not conform to the general guidelines is referred to as a “non-conforming loan”. But…to complicate things, a loan that is non-conforming simply because the loan amount exceeds the guidelines is called a jumbo loan.

For professional and knowledgeable Conventional Loan mortgage guidance, contact us. Our experience can guide you through the process and together you can be as prepared as you need to be to go through the approval process for a conventional loan.