Illinois exam glossary
Conventional loan
A $1 million home does not automatically need a jumbo mortgage. The buyer might borrow much less. Start by identifying government insurance or guaranty, then compare the right loan amount with the correct county and unit-count limit.
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The short answer
A conventional loan is a mortgage without federal or state government-agency insurance or guaranty. It can be conforming or nonconforming. Conforming eligibility requires the applicable loan limit and other Fannie Mae or Freddie Mac requirements; being below the limit is not enough. In 2026, every Illinois county has the same limits: $832,750 for one unit, $1,066,250 for two, $1,288,800 for three and $1,601,750 for four. Conventional does not automatically mean 20% down, fixed-rate or guaranteed approval.
The PSI outline effective June 24, 2026 lists conventional loans at national IV.B.1. The whole Financing domain receives 10% of the 100 scored national broker questions, or 10 questions; conventional loans have no separate published quota. Limits below concern 2026 Enterprise acquisitions, with the identified delivery and original-amount rules. These are original study exercises, not PSI questions or a validated readiness score.
Answer three questions before choosing a loan label
- Is a federal or state agency insuring or guaranteeing this mortgage? Separate that question from the private lender that originates it and from later Enterprise purchases or securities guarantees.
- What property, county, unit count and acquisition or delivery year does the problem identify? Bedrooms do not turn a one-unit house into a duplex.
- What amount does the applicable rule compare? For Fannie Mae, use the original loan amount and the delivery-time limit, including the stated modified-loan rule. Do not substitute today's smaller unpaid balance.
- If the amount fits, test the remaining borrower, income, credit, property, occupancy, product, documentation and delivery requirements. A lender can have additional lawful requirements.
- Keep government backing, conforming eligibility, interest-rate structure and Qualified Mortgage status separate. One label does not answer the others.
- For a real offer, compare the Loan Estimates and complete costs, including any mortgage insurance. This lesson does not approve a borrower, select a lender or establish a live rate.
| Legal units | 2026 Illinois limit | Exam use |
|---|---|---|
| One unit | $832,750 | Single-family home, condo unit, or one legal dwelling |
| Two units | $1,066,250 | Duplex or two legal dwellings |
| Three units | $1,288,800 | Triplex or three legal dwellings |
| Four units | $1,601,750 | Fourplex or four legal dwellings |
| Five or more units | Not this one-to-four-unit table | Commercial or multifamily framework may apply |
| Above applicable limit | Jumbo by size | Nonconforming conventional unless another program applies |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Conventional and conforming | Conventional identifies the absence of government-agency mortgage insurance or guaranty. Conforming identifies eligibility under applicable Enterprise acquisition limits and standards. A conventional loan can be nonconforming. | Do not use the two words as synonyms. |
| Conforming and jumbo | A jumbo exceeds the applicable conforming limit in the ordinary size comparison. A below-limit loan can also be nonconforming for a different reason. A higher national high-cost ceiling is not automatically the local county limit. | Illinois has no raised high-cost county limit in the 2026 table. |
| Original amount and current unpaid principal | Fannie Mae's rule uses the original loan amount, irrespective of origination date, against the delivery-time applicable limit. Its modified-loan rule also uses original amount rather than the smaller current balance. The guide has a specific co-op rule: first-lien amount plus the prorated share of the co-op blanket mortgage cannot exceed its limit. Do not replace that rule with the ordinary single-loan illustration. | Paying principal down does not by itself cure that original-amount restriction. |
| Purchase price and loan amount | The sale price can exceed the conforming limit while a smaller mortgage fits. The limit comparison is not the same as loan-to-value, which has its own value and subordinate-financing rules. | Do not add the price, down payment and mortgage together. |
| Dwelling units and bedrooms | The table distinguishes one through four dwelling units. A four-bedroom house can still be one unit. Five or more units fall outside this one-to-four-unit table. | Use the stated legal property classification. |
| Government insurance and Enterprise activity | FHA insurance, VA guaranty and USDA programs differ from Fannie Mae or Freddie Mac acquiring eligible mortgages or guaranteeing securities. Their Enterprise role does not turn an otherwise conventional mortgage into an FHA loan. | Origination, mortgage insurance and securities backing are different roles. |
| Low down payment and unrestricted eligibility | Some qualifying conventional options allow 3% down. Fannie Mae's HomeReady 95.01%-97% tier has specific fixed-rate, term, property, occupancy, underwriting and other conditions. The broader HomeReady program can include eligible ARMs at other limits. | Do not extend the 97% option to every conventional loan or every ARM. |
| PMI and borrower protection | Private mortgage insurance protects the lender or investor against part of a default loss. It does not erase the debt or protect the borrower from foreclosure. Requirements and payment structures depend on the program and coverage. Mortgage insurance commonly applies above 80% LTV on eligible conventional first mortgages, but exceptions and lender-paid structures matter; this is not a universal federal command that every conventional loan must carry PMI. | A private insurer does not create FHA insurance. |
| PMI cancellation and reaching 20% equity | Covered borrower-paid insurance has statutory request, payment-history and other conditions. Scheduled automatic termination and lender-paid insurance have different rules. A market-value estimate alone does not end every premium. | Use the PMI lesson for the detailed coverage and timing rules. |
| Fixed-rate and conventional | Fixed-rate describes interest behavior. Conventional describes government-agency backing. Eligible conventional loans can be fixed-rate or adjustable-rate. | Do not infer backing from the interest rate. |
| Conforming and Qualified Mortgage | Conforming concerns Enterprise acquisition eligibility. Qualified Mortgage is a separate Regulation Z category with its own requirements. A conventional or conforming label alone does not establish every QM or ability-to-repay condition. | Classify each dimension on its own facts. |
| Eligibility and an actual approval | An amount within the limit passes one test. Income, assets, credit, debt, property, occupancy, documentation and other requirements remain. A lender's additional lawful standards can also affect availability. | Potentially conforming by amount is not a loan commitment. |
Work through the facts
One-unit Illinois conforming amount
In 2026, a borrower seeks a $800,000 conventional loan on a one-unit Illinois principal residence.
- $800,000 is below the 2026 Illinois one-unit limit of $832,750.
- The amount passes the limit screen.
- Borrower, property, product, documentation, and all other requirements still must conform.
Answer: Potentially conforming by amount, not proven conforming overall.
One-unit Illinois jumbo
For 2026 acquisition, the proposed original conventional loan amount on a one-unit Illinois home is $850,000.
- The applicable one-unit limit is $832,750.
- $850,000 exceeds the limit by $17,250.
- A larger down payment could reduce the debt, but the stated amount is above-limit.
Answer: The stated loan is jumbo and nonconforming by size.
Price above limit, loan below limit
A one-unit Illinois property sells for $1,000,000 in 2026. The buyer makes a $250,000 down payment and borrows $750,000 conventionally.
- The conforming-limit comparison uses the loan amount, not the $1,000,000 price.
- $750,000 is below the $832,750 one-unit limit.
- All other conforming requirements remain open.
Answer: Potentially conforming by amount despite the higher purchase price.
Use duplex limit
A borrower seeks a $950,000 conventional loan on a legal two-unit Illinois property in 2026.
- The two-unit limit is $1,066,250, not the one-unit limit.
- $950,000 is within that unit-count ceiling.
- Occupancy, rental-income treatment, appraisal, reserves, and other rules still matter.
Answer: Within the 2026 Illinois two-unit limit.
Below limit but still nonconforming
A $500,000 conventional loan is below the limit, but the collateral does not meet the relevant agency's property eligibility rules.
- Loan size is only one conformity condition.
- Property eligibility is a separate acquisition requirement.
- A private lender might hold or sell the loan outside the standard agency channel.
Answer: Conventional but nonconforming under the stated facts.
Low down payment does not make FHA
An eligible buyer obtains a qualifying 3% down conventional conforming program loan.
- Down-payment percentage does not determine government backing by itself.
- The loan can remain conventional because no government agency insures or guarantees it.
- Private mortgage insurance and program-specific requirements may apply.
Answer: A low-down-payment loan can still be conventional and conforming.
Fixed or adjustable is separate
A borrower compares a conforming fixed-rate conventional loan with an eligible conforming ARM.
- Both loans can be conventional because neither has government backing.
- Both can conform if each meets applicable agency standards.
- Fixed versus adjustable describes the interest-rate structure, not government backing.
Answer: Conventional classification does not decide rate type.
A loan at the limit
For 2026 acquisition, an Illinois three-unit conventional loan has an original amount of $1,288,800.
- The stated three-unit limit is $1,288,800.
- Equality does not exceed the maximum.
- The borrower, property, product and all other acquisition conditions still require review.
Answer: Within the amount limit, with overall conformity still unproven.
A smaller unpaid balance does not change original amount
A one-unit Illinois mortgage originally was $850,000. It is modified and now has $800,000 unpaid. Evaluate the identified Fannie Mae loan-limit rule for 2026 acquisition; assume no different new refinance.
- The Illinois one-unit 2026 limit is $832,750.
- The modified-loan rule uses the $850,000 original amount, not the $800,000 current balance.
- $850,000 exceeds $832,750 by $17,250; the smaller balance alone does not cure this amount restriction.
Answer: The stated existing modified loan exceeds the original-amount limit.
Separate the down payment from total closing funds
A purchase price and appraised value are both $300,000. Assume an otherwise eligible conventional 3% down program, with no financed additions. Ignore closing costs, prepaids, credits and other funds.
- $300,000 × 3% = $9,000 down.
- $300,000 - $9,000 = $291,000 original mortgage; $291,000 ÷ $300,000 = 97% LTV.
- Eligibility, mortgage insurance and the omitted closing-funds items still require their own review.
Answer: The example gives $9,000 down and a $291,000 loan, not a verified total cash-to-close amount.
Mistakes to avoid
- Calling conventional and conforming synonyms Conventional is broader. It includes conforming and nonconforming mortgages.
- Calling every conventional loan conforming Test loan limit and every relevant agency eligibility standard.
- Calling every below-limit loan conforming Amount is one screen; borrower, property, documentation, product, and delivery rules also apply.
- Comparing purchase price with the loan limit Use the relevant original or acquisition loan balance under the applicable rule.
- Using bedroom count as unit count Choose the limit by legally recognized dwelling units, not bedrooms or occupants.
- Using a 2024 or 2025 limit in 2026 FHFA adjusts limits annually. Match the official calendar-year table to the problem.
- Assuming Illinois has a high-cost county limit in 2026 The official 2026 county list shows baseline limits throughout Illinois.
- Calling a jumbo government-insured Jumbo describes size above the conforming limit, not government backing.
- Calling jumbo and subprime synonyms Jumbo concerns loan size; subprime concerns credit or risk characteristics.
- Saying conventional always requires 20% down Eligible programs can allow less, commonly with mortgage insurance and additional rules.
- Saying PMI protects the borrower PMI protects the lender or investor against part of a default loss.
- Calling Fannie Mae a government insurer Fannie Mae is an Enterprise that acquires eligible conventional mortgages; FHA provides federal mortgage insurance.
- Calling every conventional loan fixed-rate Conventional mortgages can use fixed or adjustable rates under eligible program terms.
- Ignoring lender overlays A lender may apply standards stricter than the agency guide, subject to applicable law.
- Declaring one program cheapest without offers Compare Loan Estimates, APR, payment, mortgage insurance, cash to close, and long-term cost.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. What defines a conventional mortgage?
- It is originated directly by FHA
- It is not insured or guaranteed by a federal or state government agency
- It is always fixed-rate
- It always has 20% down
Show answer and explanation
Answer: B. It is not insured or guaranteed by a federal or state government agency
Conventional status concerns government backing, not down payment, rate structure, or loan size.
2. Can a conventional loan be nonconforming?
- No, conventional and conforming are synonyms
- Only if the original lender keeps it until maturity
- Only when a government agency insures the mortgage
- Yes
Show answer and explanation
Answer: D. Yes
Conventional loans include both conforming and nonconforming categories.
3. What is the 2026 one-unit conforming limit throughout Illinois?
- $806,500
- $766,550
- $1,249,125
- $832,750
Show answer and explanation
Answer: D. $832,750
FHFA's official 2026 county list gives Illinois the national baseline one-unit limit.
4. What is the 2026 two-unit conforming limit in Illinois?
- $1,601,750
- $1,288,800
- $832,750
- $1,066,250
Show answer and explanation
Answer: D. $1,066,250
Unit count selects the applicable row in the official 2026 table.
5. A one-unit Illinois property costs $950,000, but the 2026 conventional loan is $700,000. Which amount is compared with the conforming limit?
- $700,000 loan amount
- The current tax assessment instead of the loan amount
- $250,000 difference between price and loan
- $950,000 purchase price
Show answer and explanation
Answer: A. $700,000 loan amount
For the ordinary new-loan example, compare the $700,000 original mortgage amount, not the $950,000 sale price or the $250,000 contribution. Full eligibility and loan-to-value are separate questions.
6. A loan is below the limit. Is conformity proven?
- Only the purchase price matters
- No, all applicable agency standards still matter
- Yes, automatically
- Yes, if it is adjustable-rate
Show answer and explanation
Answer: B. No, all applicable agency standards still matter
Borrower, property, product, documentation, occupancy, and other eligibility conditions remain.
7. Which is a familiar conventional nonconforming category?
- An FHA-insured mortgage below the FHFA limit
- Jumbo loan
- A USDA-guaranteed mortgage originated by a private lender
- A VA-guaranteed mortgage with a fixed rate
Show answer and explanation
Answer: B. Jumbo loan
A jumbo exceeds the applicable Enterprise conforming loan limit.
8. Does every conventional loan require 20% down?
- Only FHA sets conventional down payments
- Yes, without exception
- No, eligible low-down-payment conventional programs exist
- Down payment never matters
Show answer and explanation
Answer: C. No, eligible low-down-payment conventional programs exist
Less than 20% can be allowed, commonly with PMI and program-specific eligibility.
9. Who does private mortgage insurance primarily protect?
- The homeowner against all foreclosure risk
- The lender or investor
- The borrower against every missed-payment obligation
- The property owner against damage to the building
Show answer and explanation
Answer: B. The lender or investor
PMI covers part of the credit loss; it does not excuse the borrower's obligation.
10. What is the clearest difference between Fannie Mae and FHA?
- Fannie Mae insurance makes every loan an FHA mortgage
- Fannie Mae acquires eligible conventional loans; FHA insures qualifying government-program loans
- FHA acquires every private jumbo while Fannie Mae sets all retail rates
- Both are federal agencies that insure the same mortgages
Show answer and explanation
Answer: B. Fannie Mae acquires eligible conventional loans; FHA insures qualifying government-program loans
Their roles and the backing of the mortgage are different.
11. A modified loan originally was $850,000 and now has $800,000 unpaid. Under the identified Fannie Mae original-amount rule and Illinois one-unit 2026 limit, what matters?
- The $850,000 original amount, which exceeds $832,750
- The borrower's desired payment
- Only the current $800,000 balance
- The property's bedroom count
Show answer and explanation
Answer: A. The $850,000 original amount, which exceeds $832,750
The guide expressly uses original amount for modified loans. The smaller current unpaid balance alone does not make this loan eligible under that limit.
12. Which limit applies to a one-unit Illinois house with four bedrooms for 2026 acquisition?
- $1,066,250 because it has multiple rooms
- $832,750 because it is one dwelling unit
- $1,288,800 because bedrooms create units
- $1,601,750 because four people could live there
Show answer and explanation
Answer: B. $832,750 because it is one dwelling unit
Dwelling-unit count, not bedroom or occupant count, selects the table row. Other eligibility requirements remain.
13. A conventional loan has an original amount exactly equal to the applicable limit. What does equality establish?
- The loan exceeds the limit
- All underwriting conditions are satisfied
- It does not exceed the amount limit; other requirements remain
- The loan has become government-insured
Show answer and explanation
Answer: C. It does not exceed the amount limit; other requirements remain
At the maximum is not above the maximum. Equality alone does not establish complete conforming eligibility or approval.
14. A mortgage is insured by a state agency. Under the identified Loan Estimate rule, which label applies?
- Other, with a brief description
- VA even without VA guaranty
- Conventional solely because a private bank originates it
- FHA even without FHA insurance
Show answer and explanation
Answer: A. Other, with a brief description
Section 1026.37(a)(11) expressly treats state-agency-insured or guaranteed mortgages as Other, with a brief description. Origination by a private bank does not change that backing.
15. Can the HomeReady 97% tier described here be applied automatically to an adjustable-rate mortgage?
- No, because all conventional ARMs are prohibited
- Yes, every HomeReady mortgage permits 97% LTV
- Yes, whenever the amount is below the limit
- No; that tier requires a fixed-rate loan and other conditions
Show answer and explanation
Answer: D. No; that tier requires a fixed-rate loan and other conditions
The identified HomeReady 95.01%-97% tier requires fixed-rate terms up to 30 years, one-unit principal-residence collateral, DU underwriting and other requirements. The broader program can permit eligible ARMs at other limits.
16. Which statement about conventional and Qualified Mortgage is sound?
- Every conventional loan is exempt from ability-to-repay law
- They are interchangeable labels
- Every jumbo is prohibited by federal law
- They answer different questions and have separate requirements
Show answer and explanation
Answer: D. They answer different questions and have separate requirements
Conventional concerns mortgage backing. QM is a distinct Regulation Z category. This lesson does not determine actual legal coverage or private loan eligibility.
17. A legal four-unit Illinois property has a $1,600,000 original conventional loan for 2026 acquisition. Which statement is correct?
- It is $1,750 below the four-unit limit, with other requirements remaining
- Its amount alone proves complete approval
- It exceeds the four-unit maximum by $1,750
- It must use the one-unit limit because one note covers the building
Show answer and explanation
Answer: A. It is $1,750 below the four-unit limit, with other requirements remaining
The four-unit limit is $1,601,750. Subtracting $1,600,000 leaves $1,750. This amount comparison does not verify occupancy, property, underwriting or delivery eligibility.
18. Why should a 2024 dollar figure on an older CFPB overview not decide a 2026 Illinois limit question?
- The oldest published amount always controls
- Use the applicable official 2026 county table and current delivery rules
- The national high-cost ceiling automatically replaces every county value
- Limits depend only on the borrower's preferred down payment
Show answer and explanation
Answer: B. Use the applicable official 2026 county table and current delivery rules
The identified CFPB overview still displays 2024 amounts. FHFA publishes the 2026 county table; the stated year, county, unit count and applicable delivery or acquisition rule control the exercise.
19. For the stated purchase with price and appraised value both $300,000, what are 3% down and the remaining original mortgage before other items?
- $9,000 down and $309,000 loan
- $9,000 down and $291,000 loan
- $30,000 down and $270,000 loan
- $3,000 down and $297,000 loan
Show answer and explanation
Answer: B. $9,000 down and $291,000 loan
$300,000 × 0.03 = $9,000; $300,000 - $9,000 = $291,000. With the stated equal price and appraisal, that is 97% LTV. Closing costs, prepaids and other funds are separate; no particular program approval or PMI quote is established.
20. For the identified Fannie Mae co-op limit rule, what is combined?
- The sale price plus all future interest
- The first-lien amount and prorated share of the co-op blanket mortgage
- Every mortgage anywhere owned by the borrower
- Only the building's bedroom count
Show answer and explanation
Answer: B. The first-lien amount and prorated share of the co-op blanket mortgage
B2-1.5-01 expressly supplies that co-op calculation. It is a particular ownership and collateral rule, rather than permission to ignore blanket debt or use a bedroom-based limit.
Common questions
What is a conventional loan?
It is a mortgage without federal or state government-agency insurance or guaranty. That describes backing, not a promise of a fixed interest rate, a particular down payment or approval. Conventional loans can be conforming or nonconforming. A private bank can also originate government-backed loans, so the lender's name alone does not decide the category.
What is the 2026 conventional loan limit in Illinois?
There is no single dollar cap on every conventional mortgage. For conforming Enterprise acquisitions in 2026, every Illinois county has limits of $832,750 for one unit, $1,066,250 for two, $1,288,800 for three and $1,601,750 for four. A larger private conventional loan can be nonconforming. All other eligibility requirements still apply below the limit.
Does Chicago or Cook County have a higher 2026 limit?
No. The official 2026 FHFA county table gives Cook County the same baseline figures as every other Illinois county. Do not apply a national high-cost ceiling merely because local homes are expensive. Always match the actual county, year and unit count in the question.
Are conventional and conforming the same?
No. Conventional is the broader backing category. Conforming eligibility adds Enterprise amount and other requirements. Jumbo mortgages and loans outside the applicable standards can remain conventional. An FHA-insured loan does not become conforming conventional solely because its amount is below an FHFA limit.
Does a home priced above $832,750 require a jumbo?
Not necessarily. A sufficiently large down payment can leave a one-unit Illinois mortgage within the 2026 amount limit. Compare the applicable loan amount, rather than the sale price alone. Loan-to-value, collateral and borrower qualifications are separate requirements, and a smaller mortgage does not guarantee approval.
Does conventional financing always require 20% down?
No. Eligible conventional programs can allow less, including qualifying 3% options. That does not mean everyone qualifies for 97% financing. Program, property, occupancy, income, loan purpose, underwriting and insurance conditions matter. Twenty percent is a useful conventional mortgage-insurance threshold, not a universal minimum down payment.
Can a conventional loan have an adjustable interest rate?
Yes, if the actual product meets the applicable requirements. Government-agency backing and interest-rate structure are separate characteristics. However, a particular low-down-payment tier can exclude ARMs. Do not carry one program's fixed-rate restriction over to all conventional mortgages.
Who does PMI protect?
PMI protects the lender or investor against part of the loss from default. It does not pay off every borrower obligation or guarantee that foreclosure cannot occur. Borrower-paid monthly, upfront and lender-paid structures can have different costs and rules. A no-monthly-PMI offer should be evaluated with its interest rate and other costs.
Does PMI automatically stop when my estimate shows 20% equity?
No universal rule works that way. Covered borrower-paid PMI has a written-request route with statutory conditions, a separate scheduled automatic-termination route and other provisions. Lender-paid insurance follows different treatment. The PMI glossary explains the detailed rules; this page does not decide a private cancellation date or authorize a servicer charge.
Does Fannie Mae make the buyer's original loan?
In the ordinary secondary-market example, a lender originates the mortgage and an Enterprise may later acquire an eligible loan or guarantee securities. Fannie Mae and Freddie Mac are government-sponsored enterprises under FHFA conservatorship, rather than FHA or VA mortgage-insurance programs. Acquisition does not itself remove the borrower's duty to repay.
Does paying down a jumbo automatically make the existing loan conforming?
Not under the identified Fannie Mae original-amount rule. Its modified-loan provision compares original amount, rather than the unpaid balance at modification or acquisition, with the applicable limit. A genuinely new refinance raises its own loan amount, costs and eligibility questions. Do not describe a principal payment alone as an automatic conversion.
Which year's limit applies to an older loan delivered in 2026?
Fannie Mae states that the 2026 limits apply to loans delivered in 2026 even if originated before January 1. Its guide still uses original loan amount. Freddie Mac's identified announcement also bars sale before January 1, 2026 when the mortgage exceeds 2025 limits but fits the new 2026 limits. Check the applicable acquisition and delivery terms, rather than only the application date.
Is a jumbo loan the same as a subprime loan?
No. Jumbo ordinarily describes an amount exceeding the applicable conforming limit. Subprime concerns credit or risk characteristics. Nonconforming products can serve different borrowers and properties, and their pricing and requirements vary. The label alone does not establish safety, suitability or the cheapest offer.
Are these official PSI questions or an approval guide?
These are original educational exercises, not secure PSI questions, a validated readiness score or an underwriting decision. Explain the backing, applicable amount rule and remaining eligibility conditions. A real loan requires current complete documents, lender terms and the applicable professional review. No score on this page guarantees approval or passing the licensing exam.
Is a loan exactly at the conforming limit a jumbo?
Equality does not exceed the maximum. For the 2026 Illinois three-unit example, $1,288,800 is at the amount limit. The loan must still meet the other acquisition requirements. A one-dollar difference can change the amount comparison, but it does not settle all underwriting, title, occupancy or documentation issues.
What does a 3% down payment actually cover?
In the stated $300,000 purchase with an equal appraisal, 3% is $9,000 and the remaining original mortgage is $291,000, or 97% LTV. That $9,000 is a down-payment illustration, not a full cash-to-close quote. Closing costs, prepaids, credits, permissible assistance and program requirements need separate treatment. No mortgage-insurance premium or approval is calculated here.
Is every HomeReady loan restricted to first-time buyers and fixed rates?
No. The broader program can include eligible repeat buyers, one-to-four-unit principal residences and certain ARMs. Its 95.01%-97% tier is narrower: fixed-rate terms up to 30 years, one-unit principal residence, DU underwriting and other conditions, including the identified manufactured-housing restriction. HomeReady also has qualifying-income limits and applicable education rules. Do not describe one tier as every conventional borrower's entitlement.
Can a lender require more than the basic Enterprise conditions?
A lender can apply additional lawful credit or operational requirements. Meeting an Enterprise limit does not compel every lender to offer the same product, rate, down payment or approval. Compare actual written offers and current applicable guides. The glossary does not decide whether a particular denial, overlay, fee or private loan is lawful or appropriate.
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Official sources and scope
Reviewed October 28, 2026 against the identified official sources and explicit earlier primary readings. The 2026 FHFA figures were checked across all 102 Illinois county rows. CFPB's older conventional-loan overview still shows 2024 amounts and is not used as 2026 limit evidence. Only identified guide sections were reviewed, not every lending rule or a private loan file. Limits, guides, product eligibility and actual offers must be checked for their applicable dates.
- PSI June 24, 2026 broker outline: Financing
- Fannie Mae: role in the secondary mortgage market
- FHFA: current Fannie Mae and Freddie Mac conservatorships
- Fannie Mae B2-1.2-01: LTV definitions and delivery rounding
- Fannie Mae B7-1-01: insurance-purpose LTV and coverage conditions
- 12 U.S.C. 4902: Cancellation, termination, modification and refunds
- 12 U.S.C. 4905: Separate lender-paid insurance treatment
- Regulation Z 1026.43: balloon ability-to-repay and qualified-mortgage conditions
- CFPB: conventional mortgage definition
- Regulation Z 1026.37(a)(11): Loan Estimate loan type
- FHFA: 2026 conforming loan limit announcement
- FHFA official 2026 county loan-limit table: all Illinois counties
- Fannie Mae B2-1.5-01: original amount, delivery and modified loans
- Fannie Mae: 2026 delivery-year limits
- Freddie Mac: 2026 loan limits and effective sale date
- Fannie Mae B5-6-01: HomeReady eligibility and 97% restrictions
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.