Conventional loans are any mortgage that is not guaranteed or insured by the federal government. Although a conventional loan is not insured or guaranteed by the government, it still follows the guidelines of government sponsored enterprises, Fannie Mae and Freddie Mac.

Conventional loans may be “conforming” and “non-conforming”. Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac. These guidelines put the maximum purchase amount for a first mortgage at $647,200 (may be higher, subject to county loan limits) for a single-family dwelling. If the purchsase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan.