Conventional

HomeReady® (Fannie Mae), Home Possible® (Freddie Mac) and HomeOne (Freddie Mac) are all Conventional loan programs designed for low-to-moderate income borrowers. At Murray Mortgage Solutions, we automatically check whether you qualify for these programs as well as others such as BorrowerSmart (Freddie Mac). Many lenders reference these programs and terms as marketing strategies but they're available to nearly all banks, brokers and lenders across the country.

Yes, first-time homebuyers may receive better interest rate pricing through reduced Loan Level Price Adjustments (LLPAs) — which are fees built into the rate based on credit score, down payment, and other risk factors. Fannie Mae and Freddie Mac apply more favorable LLPA grids for qualifying first-time buyers, especially those under certain income limits.

Conventional loans aren’t a single program, they’re a category of mortgages that follow Fannie Mae or Freddie Mac guidelines and aren’t backed by the government like FHA or VA loans. Within the Conventional category, there are different subtypes like HomeReady®, Home Possible®, HomeOne®, 97% LTV options for first-time buyers, renovation loans, construction loans and high-balance loans in certain areas. It’s important to know that not all non-government loans are Conventional, some fall outside those guidelines entirely, like jumbo or non-QM loans. At Murray Mortgage Solutions, we help you figure out which Conventional or non-Conventional option fits your situation best.

FHA loans are insured by the government and are primarily designed for applicants with lower credit scores. They include upfront and monthly mortgage insurance, regardless of down payment. Conventional loans are not directly government-backed and generally require higher credit scores, but they allow for as little as 3% down for first-time buyers and may offer lower overall costs for well-qualified borrowers. We evaluate both options for each client based on qualifying factors and the specific loan scenario.

A minimum FICO score of 620 is generally required to qualify for a Conventional loan, though this can vary depending on loan structure, down payment, and other risk factors. It's important to understand that the mortgage industry uses a specific FICO scoring model that differs from what you see on consumer credit apps. As a result, your qualifying score for the loan may be higher or lower than expected. We review the actual tri-merge mortgage credit report during the process to determine eligibility.

Private Mortgage Insurance (PMI) rates on Conventional loans vary based on several risk factors, primarily credit score, loan-to-value ratio (LTV), and loan type ( purchase vs. refinance). The lower your credit score and the smaller your down payment, the higher the PMI rate tends to be. During your Approval Review meeting, we'll discuss your PMI Rate and strategies to reduce it.

Loan-Level Price Adjustments (LLPAs) are publicly available risk-based pricing adjustments applied to Conventional loans by Fannie Mae and Freddie Mac. (Search Fannie Mae LLPA Matrix). They’re based on factors such as credit score, loan-to-value ratio (LTV), occupancy type, loan purpose, and property type. LLPAs aren’t itemized on your loan estimate, they’re factored into the Pricing of the interest rate.

At Murray Mortgage Solutions, we analyze your full profile upfront to identify LLPA triggers and explore ways to reduce their impact. This may include adjusting down payment levels, evaluating co-borrower options, or checking eligibility for LLPA waivers available to first-time or income-qualified buyers. The goal is to structure your loan as efficiently as possible.