Current conventional guidelines, updated from one source.
The block below is the conforming rulebook reduced to the figures that decide a file, read from Lendmire’s single guideline source and refreshed on this page when the agencies or the wholesale overlays change: the down payment by buyer, the credit floor, the mortgage insurance threshold and its cancellation points, and the ratio maximums.
First-time buyer; 5% standard; 97% loan-to-value at the top
On a principal residence the down payment starts at 3% for a first-time buyer and 5% otherwise, the top leverage being 97% loan-to-value. Second homes and investment properties ask for more, as the leverage table shows, and the price of any leverage above 80% is mortgage insurance.
Priced on the score; no agency minimum with an automated approval
Conventional credit works on a slope rather than a cliff: the floor is 620 on the programs Lendmire places loans with, 620 on a manual fixed-rate file and 640 on a manual adjustable, and the score above that sets the loan-level adjustments and the insurance premium. With more than one borrower the automated system reads the average of the median scores.
Required above 80% LTV; removed at 80% by request, 78% automatically
Mortgage insurance is required when the loan exceeds 80% loan-to-value, and it’s temporary: the borrower may ask for cancellation when the balance hits 80% of the original value, and the servicer must end it automatically at 78%. Fannie Mae reports premiums typically ran 0.58%–1.86% of the loan a year, set by the insurer on score and leverage.
With an automated approval; 36% to 45% on a manual file
Lenders compare total debt against gross income, with limits up to 50% on an automated approval and 36% to 45% on a manual file. The housing payment counted includes the mortgage insurance while it applies, which is why cancellation changes the ratio as well as the payment.
| Purpose | Occupancy and program | Maximum LTV |
|---|---|---|
| Purchase | One-unit principal residence, first-time buyer (fixed rate) | 97% |
| Purchase | One-unit principal residence, standard | 95% |
| Purchase | HomeReady / Home Possible (income limits apply) | 97% |
| Purchase | Two- to four-unit principal residence | 95% |
| Purchase | Second home | 90% |
| Purchase | Investment property, one unit | 85% |
| Purchase | Investment property, two to four units | 75% |
| Refinance | Limited cash-out (rate-and-term), one-unit principal residence | 95% |
| Refinance | Cash-out, one-unit principal residence | 80% |
| Refinance | Cash-out, two to four units, second home or investment | 75% |
| Combined LTV | Maximum contribution |
|---|---|
| above 90 percent | 3% of the sales price |
| 75.01 to 90 percent | 6% of the sales price |
| 75 percent or less | 9% of the sales price |
| investment property (any) | 2% of the sales price |
| Event | Waiting period |
|---|---|
| Chapter 7 or 11 bankruptcy | four years from discharge or dismissal (two years with documented extenuating circumstances) |
| Chapter 13 bankruptcy | two years from discharge; four years from dismissal (two with extenuating circumstances) |
| Multiple bankruptcy filings | five years when more than one filing within the past seven years |
| Foreclosure | seven years (three with extenuating circumstances, then limited to a principal residence or second home at 90 percent LTV, purchase or limited cash-out) |
| Deed-in-lieu, short sale or mortgage charge-off | four years (two with extenuating circumstances) |
Mortgage insurance: Fannie Mae reports that private mortgage insurance typically ranged from 0.58%–1.86% of the loan amount a year; the premium on a specific loan is priced by the insurer on the score, the leverage, and the coverage, and is never quoted here. Gifts from relatives may fund the entire down payment on a one-unit principal residence. HomeReady and Home Possible lend to 97% with income at or below 80% of the area median; HomeOne lends to the same leverage with a first-time buyer and no income limit.
Current conventional snapshot · updated October 3, 2026 · principal residences occupied within sixty days, second homes, and one- to four-unit investment properties · conforming limits apply by county and are confirmed by a Lendmire loan officer · above the limit, see the jumbo program · no prepayment penalty · Lendmire is a broker, never the lender.
For informational purposes only. This is not a commitment to lend or extend credit, an offer, or a quote. Program parameters shown are Fannie Mae and Freddie Mac guidelines and wholesale lender overlays, are subject to change without notice, and every figure depends on the borrower, the property, the occupancy, the automated underwriting finding, and full underwriting. Mortgage insurance figures are published typical ranges and editable estimates, not premium quotes. Conforming loan limits apply by county. Lendmire is a mortgage broker, not a lender. Licensed in sixteen states for consumer mortgages. NMLS #2371349.
What a conventional loan is — and how the file is qualified.
The difference between a conventional loan and a government loan is who stands behind it. No agency insures a conforming loan; a private insurer covers the top slice above the threshold, and the agencies buy the loan on their rules. That structure explains each of the four pieces below for a Foley buyer.
For the program overview, see Lendmire’s conventional loan program, or the statewide guide at Conventional Loans in Alabama; for the mortgage insurance cancellation rules, see the CFPB.
Leverage by occupancy and buyer
Leverage on a Foley conventional loan is a table rather than a single number: purchase against refinance, principal residence against second home against rental, one unit against several. Each cell has its own maximum, a cash-out refinance sits below the purchase ceiling for the same occupancy, and the snapshot shows the whole table.
Credit scores and automated underwriting
The automated system reads the score and the credit events together, and a derogatory event does not end eligibility; it starts a clock. Bankruptcies, foreclosures, short sales, and deed-in-lieu transfers each carry a waiting period in the agencies’ guides, shortened by documented extenuating circumstances, and the snapshot shows each one for a Foley buyer.
Mortgage insurance that cancels
The federal cancellation rules are the quiet advantage of a conventional loan. The borrower can ask to drop the insurance when the balance reaches the request threshold, the servicer must drop it at the automatic threshold, and it cannot outlast the midpoint of the term. On an FHA loan at full leverage the premium stays for the life of the loan.
Ratios, reserves, and the DU finding
Reserves are measured in months of the total housing payment and set by the finding, the occupancy, and the number of financed properties; a Foley second-home or investment file carries more than a principal residence. Income needs a two-year history and a reasonable expectation of continuing.
None of this is a decision. The appraisal can come in under the price, the rate is set at lock, the premium is set by the insurer, and the automated finding sets the reserves. What stays fixed is the structure the calculator reproduces: price, down payment, leverage, insurance, payment.
Where Foley buyers borrow — and how a conforming loan fits.
Three Census figures frame a Foley conventional file. Ownership says how much of the market the program reaches, the median value says what a low-down-payment loan typically comes to, and household income says what ratio that payment produces.
These are context figures, not underwriting inputs. Two buyers at the same score can see different files here: one buys at the median and sits well inside the ratio, another stretches above it and needs reserves and a stronger finding. The market sets the spread.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Foley neighborhoods, distinct conventional files.
Where Foley buyers shop, and what the conforming file turns on in each place: the occupancy, the property type the appraiser sees, the project review it needs, and the price the ratio has to carry.
Higher-value homes
The higher-value Foley file is a limit question, not an eligibility question. The conforming limit caps the loan amount, and the buyer either adds down payment to fit under it or chooses the jumbo route for the whole purchase. On a one-unit principal residence at Foley’s median value, the first-time buyer’s minimum down payment comes to about $8,700 and the standard minimum to about $14,500 — before closing costs, and before the mortgage insurance that comes with either; a second home, a multi-unit home, or a rental starts higher, as the leverage table shows.
Condominiums and townhomes
Townhomes in Foley finance like houses when they are fee simple and like condominiums when they are organized as one; the lender settles which before the appraisal, and the leverage follows the occupancy either way. Roughly 8,012 Foley households own their homes on the latest Census estimate — 71% of all households, the pool a conventional purchase joins.
Newer infill and recent construction
New rows and recent infill in Foley tend to appraise cleanly, so the loan amount is the question: a contract near the conforming limit is checked against the county figure before the offer, and a loan above it needs a larger down payment or the jumbo program. The median owner-occupied home value in Foley runs near $289,300 on the latest Census estimate.
Investor and second-home purchases
Foley rentals and pied-à-terre purchases run on conventional loans because FHA and VA finance principal residences only. Conventional terms include investment and second-home leverage in the snapshot, reserves for each financed property, and adjustments for the occupancy. Foley is home to about 24K people and sits within the Daphne-Fairhope-Foley, AL area.
Two-to-four-unit homes
The owner-occupied multi-unit Foley file is a conventional specialty with its own leverage, its own rent-counting rules, and its own reserve requirement. The buyer in one unit qualifies on the combined picture. About 29% of Foley’s households rent — roughly 3,281 renter households on the latest Census estimate.
Established close-in neighborhoods
The Foley blocks nearest the core carry the oldest houses, and a conventional appraisal reads them for value first and condition second: no HUD or VA property standard, but the home must be safe, sound, and marketable, and a failing roof or system still draws a condition note. Median household income in Foley sits near $66,336 on the latest Census estimate.
Each Foley submarket has its own property story, and the appraisal and the project review are where that story is told. The leverage limits, the cancellation rules, and the automated finding are the constants.
Four ways Foley buyers put a conforming loan to work.
Foley borrowers use conforming loans for reasons that repeat, from the first purchase at the first-time-buyer minimum to the refinance on a home with equity, and the cards below take up the ones that come up most often.
Buy an investment property
The rental purchase is inside the conventional program at a lower leverage than a principal residence: a Foley buyer uses the agencies’ rules for counting rental income, shows reserves for every property financed, and accepts loan-level adjustments that reflect the occupancy.
Buy a second home
For the Foley vacation or weekend home, the conforming loan is usually the only consumer route: FHA and VA finance principal residences only. The down payment is larger, the reserves are deeper, and the score prices the loan the same way it does on any conventional purchase.
Buy a condominium in a warrantable project
A Foley condominium is a conventional purchase when the project passes the agencies’ review: owner-occupancy mix, budget and reserves, litigation, commercial space, and ownership concentration. The dues enter the ratio, and the leverage follows the occupancy as it would on a house.
Refinance or take cash out
A Foley owner can refinance a conventional loan two ways: a limited cash-out refinance to the rate-and-term leverage in the snapshot, or a cash-out refinance to the lower cash-out leverage after the seasoning period, on a principal residence, second home, or rental at each occupancy’s own limit.
Estimate the payment on a Foley price before requesting a quote.
Before you ask for a quote, size the payment yourself: the Foley price, the down payment, the term, the benchmark rate, the insurance estimate, and the escrows go in, and the thresholds and the ratio ceiling come from the same guideline source as the block above. The result is an estimate, the rate is a published market average, and the insurance figure is an editable estimate inside Fannie Mae’s published range.
Foley conventional payment estimate
Use the Foley defaults as a starting point and change the price, the down payment, the buyer type, the term, the insurance estimate, and the escrows to fit.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a conventional loan quote.
Estimate seeded at the low end of Fannie Mae’s published range (0.58%–1.86% a year); the insurer prices the actual premium on the score and the leverage. Applies only above 80% loan-to-value.
Illustrative starting assumptions: a $290,000 price near Foley’s median owner-occupied home value, the first-time buyer’s minimum down payment, a thirty-year term at the current Freddie Mac benchmark, mortgage insurance at the low end of Fannie Mae’s published range, property taxes and insurance estimated for Alabama (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a conventional loan quote; your rate is set by the lender at lock. The mortgage insurance figure is an editable estimate seeded from Fannie Mae’s published typical range, not a premium quote; the insurer prices the actual premium, and the cancellation month assumes scheduled payments with no extra principal and no change in value. Taxes, insurance and dues are editable estimates; closing costs are not included. Conforming loan limits apply by county. Licensed in sixteen states for consumer mortgages.
Same buyer, three very different closings.
Most buyers can close the same purchase three ways, and the structures differ more than the labels suggest: conventional with insurance that cancels, FHA with a small investment and premiums for the life of the loan at full leverage, or VA with nothing down and no insurance for the eligible veteran.
Conventional, FHA, or VA.
This program offers a low down payment for first-time buyers, insurance set by the score and removed once the balance falls below the threshold, and no upfront premium on the monthly structure. Of the three programs compared here, it alone finances second homes and investment property. The cost is a credit standard that prices a weak score heavily.
FHA asks for a small minimum investment that a gift can cover, accepts a forgiving decision score, and charges an upfront premium plus an annual premium that lasts for the term at full leverage. For a Foley buyer with a modest score it usually wins; for a strong score the conventional premium is smaller and temporary. See Lendmire’s FHA loan program.
VA beats conventional on the principal residence for nearly every eligible borrower; conventional beats VA on everything VA does not touch: second homes, rentals, and buyers without the certificate. The two often sit side by side in one Foley household. See Lendmire’s VA loan program.
Choose by profile: a strong score and any down payment point to conventional; a modest score and a small down payment point to FHA; eligibility with full entitlement points to VA. A Foley loan officer runs all three on the same numbers before recommending one. Above the conforming limit, see the jumbo loan program.
What to prepare for a Foley scenario review.
The paperwork is the standard mortgage set, with the automated finding deciding how much of it the file actually needs; here is what a Foley scenario review typically draws on.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the automated underwriting finding, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
What moves a Foley file most often: the insurance and its cancellation, the score and the cost it sets, the appraisal, the condominium review, the conforming limit, the ratio and the reserves, the occupancy rule, and the seasoning after a credit event.
Use these checks to keep the Foley file clean and fundable.
Before asking for a quote, know three answers: how much insurance the leverage carries and for how long, what the score does to the price, and whether the property and the loan amount fit the conforming program.
- Plan the insurance: the premium is priced on the score and the leverage inside the published range.
- Confirm the score: the lender’s report sets the decision score; multiple borrowers use the average of the median scores.
- Mind the appraisal: a short value is paid in cash, renegotiated, or released under the contingency.
Mortgage insurance: how much, and until when
The premium on a Foley loan can be paid monthly, paid by the lender in exchange for a different price, paid as a single premium at closing, or split. The monthly structure cancels under the federal rules, and the others are set by the lender. The calculator shows the monthly structure and the month the thresholds arrive on scheduled payments.
The score sets the cost
The decision score comes from the lender’s report, and with multiple borrowers the automated system uses the average of the median scores. On a Foley conventional file the score rarely ends eligibility, but it sets the loan-level adjustments and insurance premium, so a few points can change monthly cost.
The appraisal and value acceptance
A conventional appraisal values the Foley home and reports on condition without a HUD or VA property standard; the home must be safe, sound, and marketable. The automated system sometimes offers value acceptance or an appraisal waiver, in which case no appraisal is ordered and the file closes on the system’s valuation.
Warrantable or not
A Foley condo is a conventional purchase when the project passes agency review: owner-occupancy mix, budget and reserves, litigation, commercial space, single-entity ownership, and insurance. One that fails is non-warrantable and outside the conforming program; a portfolio lender may still lend on other terms.
Waiting periods after a credit event
A documented hardship beyond the borrower’s control, such as a job loss or a medical event, can shorten several of the waiting periods, and the shortened foreclosure period limits the leverage and the occupancy. A Foley file inside a waiting period is written later, not now.
From a Foley pre-approval to keys in hand.
Four steps: the pre-approval, the appraisal, the underwriting, and the closing. The Foley version of each follows.
Pre-approval
A Foley pre-approval is a sizing exercise run through the automated system: the score, the income, the assets, the occupancy, and the price. The finding sets the ratio room and the reserves, and the loan officer puts the pre-approval in writing for the offer.
Contract and appraisal
The appraisal is a valuation first and a condition report second on a conventional file; a short value re-sizes the loan, and the Foley contract is adjusted or released under its contingency. Where the system offers value acceptance, the step collapses to the system’s figure.
Underwriting
Underwriting on a Foley conventional file verifies the finding: the documents behind income and assets, the source of the down payment, the project review, and the insurance commitment for the leverage. Conditions are cleared and the approval is issued with its terms.
Closing
The Foley closing applies the program’s structure: the insurance premium in the payment while it applies, the escrow account, and no upfront premium on the monthly structure. The buyer moves in within sixty days on a principal residence, and the servicer tracks the balance toward the cancellation thresholds.
A brokerage that prices the whole market.
Lendmire never lends. It reads a Foley file against conventional, FHA, and VA, matches the program to the profile, and keeps the premium, the cost tier, and the conforming limit in front of the buyer before anything is signed.
Several programs, one set of numbers
The comparison printed on this page is run for real on every Foley file: conventional with the insurer’s actual premium beside FHA with its premiums beside VA where eligibility exists, and the written terms follow from it.
The insurance explained before the offer
No Foley buyer should learn at the closing table what the insurance costs or how long it lasts. The loan officer walks through the premium for the leverage chosen, the month the thresholds arrive on scheduled payments, and the alternative of a larger down payment.
Licensed, consumer-purpose, in writing
Lendmire carries the license for the state the Foley home is in, delivers the disclosures a consumer mortgage requires, and commits the terms to paper. The program figures on this page are read from one guideline source built on the agencies’ published guides.
Trusted by buyers & families alike.
Foley conventional loan FAQs
Plain answers to the questions Foley buyers ask most about conventional loans, in the order they usually ask them.
What is a conventional loan, and who is it for?
The general-purpose mortgage: conforming to the agencies’ guides, priced on the credit score, insured privately only while the leverage is above the threshold. It is the program most Foley buyers compare first and, of the three compared here, the one that reaches a second home or an investment property.
How much do I need to put down on a conventional loan in Foley?
A small share of the price for a first-time buyer, a little more for a repeat buyer, and twenty percent to skip the insurance. A loan officer turns the percentages into dollars on the price you choose.
What credit score do I need for a conventional loan?
A conventional loan prices credit rather than simply gating it. The practical floor is the wholesale overlay in the snapshot; the agencies’ own minimum applies only to manual underwriting. Above the floor, the premium and the loan-level adjustments fall as the score rises.
How does private mortgage insurance work, and when does it end?
Above the threshold the insurance is part of the Foley payment; below it, there is none. Fannie Mae publishes the typical annual range shown in the snapshot, the insurer prices the actual premium, and the federal cancellation rules end it as equity arrives.
What is the conforming loan limit in Foley?
Ask a loan officer for the county’s current limit; it changes yearly and by unit count. Above it, a Foley purchase is still possible with a larger down payment on a conforming loan or on a jumbo loan.
What does the appraisal check on a conventional loan?
Value against the contract price, and condition against the lender’s standard of safe, sound, and marketable. Older Foley homes draw condition notes more often; most are settled before closing.
Is a conventional loan assumable?
Conventional loans are generally not assumable because of the due-on-sale clause. The exception is a subset of adjustable-rate loans, and the loan documents govern.
How does a conventional refinance work?
It depends on the goal: you can change the rate or term with a limited cash-out refinance, or borrow against equity with a cash-out refinance. Each has its own leverage, and a Foley loan officer compares either with a home equity line before recommending one.
What are HomeReady, Home Possible, and HomeOne?
Affordable conventional lending in three flavors: two income-limited programs and one first-time-buyer program. The Foley buyer who fits one gets the lowest conventional down payment with a lighter insurance requirement.
Can I buy a rental property with a conventional loan?
Yes, at the investment leverage, with the rents documented and reserves for each financed property. Larger portfolios and entity-vested files move to investor programs; the conventional loan covers the first few.
The Foley conforming file, priced across the market and explained plainly.
Ask for a Foley scenario review to confirm the leverage, the insurance and its exit, and the loan the program supports. Lendmire is a broker licensed in sixteen states for consumer mortgages and is never the lender.
This guide covers Foley — for the statewide guidelines, markets, and scenarios, see Conventional Loans in Alabama, part of Lendmire’s conventional loan program.
Nearby markets in Alabama: Orange Beach · Gulf Shores · Fairhope · Daphne · Mobile · Dothan · Montgomery · Tuscaloosa
Related programs: FHA Loans · Jumbo Loans · Refinance Loans