The Wendy Thompson Team offers conventional mortgage loans in Memphis, TN and all of the surrounding areas including Shelby County, Tipton & Fayetteville as well as Mississippi! Conventional loans come with their own pros and cons, and we will walk you through everything you need to know.
The industry term “conventional loan” just means a loan that is NOT backed by the government. VA, FHA and USDA loans are examples of government backed or “non-conventional” loans.
Instead, conventional loans are backed by private lenders. These lenders are typically banks, credit unions, and mortgage companies. The exceptions to this rule are the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
The other term you’ll probably hear thrown about is “conforming” loans. That simply means the loan “conforms” to guidelines set by Fannie Mae (FNMA) and Freddie Mac (FLMC). These two government entities set mortgage lending guidelines, buy mortgages from lenders and sell them to investors.
Sounds complicated, right?
When considering a conventional loan for your home purchase in Tennessee, it’s essential to understand the specific requirements you’ll need to meet. These requirements help lenders evaluate your eligibility for this type of mortgage.
Here are the key criteria you should be aware of:
Loan Limits: Conventional loans have maximum loan limits that vary by county. In 2024, the conventional loan limits for Shelby County and surrounding areas are set at $766,550.
It’s important to note that while these are general requirements, each lender may have specific policies and guidelines.
Therefore, it’s advisable to consult with multiple lenders to find the one that best suits your financial situation and homeownership goals.
These limits represent the maximum loan amounts for conventional mortgages in Tennessee in 2024, depending on the number of units in the property. It’s important to note that these limits can impact your eligibility and borrowing capacity when applying for a conventional home loan in the state. Understanding these limits is crucial for both homebuyers and lenders in the Tennessee housing market.
County | state | One Unity | Two-Unit | Three-Unit | Four-Unit |
---|---|---|---|---|---|
ANDERSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
BEDFORD COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
BENTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
BLEDSOE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
BLOUNT COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
BRADLEY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CAMPBELL COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CANNON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
CARROLL COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CARTER COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CHEATHAM COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
CHESTER COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CLAIBORNE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CLAY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
COCKE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
COFFEE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CROCKETT COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
CUMBERLAND COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
DAVIDSON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
DECATUR COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
DEKALB COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
DICKSON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
DYER COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
FAYETTE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
FENTRESS COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
FRANKLIN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
GIBSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
GILES COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
GRAINGER COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
GREENE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
GRUNDY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HAMBLEN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HAMILTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HANCOCK COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HARDEMAN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HARDIN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HAWKINS COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HAYWOOD COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HENDERSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HENRY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HICKMAN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HOUSTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
HUMPHREYS COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
JACKSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
JEFFERSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
JOHNSON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
KNOX COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LAKE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LAUDERDALE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LAWRENCE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LEWIS COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LINCOLN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
LOUDON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MCMINN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MCNAIRY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MACON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
MADISON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MARION COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MARSHALL COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MAURY COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
MEIGS COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MONROE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MONTGOMERY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MOORE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
MORGAN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
OBION COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
OVERTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
PERRY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
PICKETT COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
POLK COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
PUTNAM COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
RHEA COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
ROANE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
ROBERTSON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
RUTHERFORD COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
SCOTT COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SEQUATCHIE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SEVIER COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SHELBY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SMITH COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
STEWART COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SULLIVAN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
SUMNER COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
TIPTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
TROUSDALE COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
UNICOI COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
UNION COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
VAN BUREN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WARREN COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WASHINGTON COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WAYNE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WEAKLEY COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WHITE COUNTY | TN | $766,550 | $981,500 | $1,186,350 | $1,474,400 |
WILLIAMSON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
WILSON COUNTY | TN | $943,000 | $1,207,200 | $1,459,250 | $1,813,500 |
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No, a 20% down payment is not a strict requirement for a conventional loan. While a 20% down payment can help borrowers avoid private mortgage insurance (PMI), it’s possible to obtain a conventional loan with a lower down payment. Some lenders offer conventional loans with down payments as low as 3% to 5%.
Approval for a conventional loan can vary based on factors like credit score, income, and debt-to-income ratio. While it may have stricter requirements compared to some loans, many borrowers with good credit and financial stability are approved.
Conventional loans offer down payment options as low as 3% to 5% of the home’s purchase price. The exact minimum may vary among lenders and loan programs.
Common reasons for denial include a low credit score, insufficient income, high debt-to-income ratio, and inadequate employment history. Lenders assess various factors to determine eligibility.
The choice between conventional and FHA loans depends on individual circumstances. Conventional loans may offer lower costs with a higher down payment, while FHA loans can be more accessible with a lower down payment. Consider your financial situation and goals when deciding which is better for you.