Conventional loans, also known as “conforming loans,” are insured by Fannie Mae and Freddie Mac, and have varying loan amount limits based on the property’s location. In Texas, for example, the conforming loan limit is $424,100.
In San Francisco, where the median home prices are considerably higher, the loan limit is $636,150. These loans typically require PMI (private mortgage insurance) if the loan to value exceeds 80%, however, you may be able to obtain a conventional loan without PMI with less than 20% down if a subordinate lien is obtained.
You may have heard this type of structure referred to as an 80-10-10. 80% loan with a 10% second lien and 10% down from the buyer.
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