Conventional Loan

A conventional loan is a conforming mortgage that meets Fannie Mae or Freddie Mac guidelines and is qualified on your personal income and debt-to-income ratio. It suits W-2 buyers who have room in their DTI, because the lender is underwriting you rather than the property’s projected earnings.

Projected short-term rental income generally does not count toward qualifying, which is a common surprise for first-time investors. Rates and down payment requirements vary by occupancy type, and loan-level price adjustments raise the cost for investment properties, so the same conventional product can price quite differently depending on how you will use the home.