Written by Dan Green
Dan Green
Dan Green (NMLS 227607) is a licensed mortgage professional who has helped millions of people achieve their American Dream of homeownership. Dan has developed dozens of tools, written thousands of mortgage articles, and recorded hundreds of educational videos. Read more about Dan Green.
This website discusses mortgage programs and how to qualify. Your eligibility may vary based on lender guidelines and investor overlays. Check with your lender for specific details.
Trusted Content
This article was checked for accuracy as of September 20, 2024. Learn more about our commitments to accuracy and your mortgage education in our editorial guidelines.
Updated: September 20, 2024
Mortgage guidelines are the rules and standards used to underwrite, approve, and fund a mortgage loan. These guidelines vary by loan type and lender and are updated periodically.
Mortgage guidelines serve as a lender’s approval checklist. They list the minimum standards required to approve a loan.
These guidelines vary by loan type.
For instance, conventional mortgage guidelines are different from FHA guidelines, which are also distinct from VA mortgage and USDA mortgage guidelines.
Additionally, within each loan type, programs may have different requirements.
Fannie Mae’s HomeReady mortgage, for example, targets low-to-moderate income households and has different standards than its HomePath program, which supports buying foreclosed properties.
Similarly, FHA’s 203k rehabilitation loan has different guidelines compared to a standard FHA mortgage.
Mortgage guidelines cover a wide range of criteria, including:
Guidelines also outline requirements for property type, zoning, and the relationship between buyer and seller.
To lenders, these guidelines function as a checklist. When all items are met, the loan is approved.
Mortgage guidelines can be established by government agencies like Fannie Mae or Freddie Mac, or by individual lenders for specific loan programs.
Guidelines change based on economic conditions, legal requirements, and risk strategies. In some years, they may change frequently, while in others, updates are less common. Generally, agencies and lenders provide notice before making changes.
Lenders may impose stricter standards than the official guidelines, called investor overlays. A common example is raising the minimum credit score required for a specific loan program.
Mortgage guidelines set minimum standards for loan approval. If you can’t meet a lender’s guidelines, you may want to explore different loan options or apply with another lender.
Lenders may consider exceptions to specific guidelines when the borrower provides a reasonable and common-sense explanation. Exceptions are rare and typically require formal approval in writing.
Wave goodbye to waiting times and say hello to our faster, better mortgage application. It's available anytime you are, 24/7/365. The power to approve your mortgage is just a click away.
What is a Starter Home?
Mortgage guidelines are the rules and standards used to underwrite, approve, and fund a mortgage loan. Mortgage guidelines vary by mortgage loan type and lender, and change periodically.
Member FDIC. Equal Housing Lender.
Homebuyer.com
Operated by Novus Home Mortgage
230 Findlay Street
Cincinnati, OH 45214
513-824-8171
Notices
Mortgages