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HOC, as a Housing Finance Agency (HFA), has been approved to offer Fannie Mae’s HFA Preferred Mortgage Loan product (Conventional Financing) to qualified homebuyers. The Single Family Mortgage Purchase Program (MPP) will offer as one of its mortgage options Conventional Financing, which is insured by a private mortgage insurer. HOC will continue to offer Federal Housing Administration (FHA) insured government loans.

Through the HOC Mortgage Purchase Program Conventional financing offers:
  • Minimum down payment of 3%
  • Down payment can be from a gift, grant or HOC’s Closing Cost and Down payment Assistance Programs
  • Minimal borrower contribution
  • Reduced mortgage insurance 
  • 30-Year Fixed Rate with Zero Points

To apply for the program, contact one of our participating lenders. For more information about the program, contact HOC's Single Family Mortgage Purchase Program at This email address is being protected from spambots. You need JavaScript enabled to view it. or (240) 627-9598.

Conventional Financing Frequently Asked Questions (FAQ)

1. What are the benefits of the Conventional financing product?

  • Conventional financing allows up to a 97% LTV (3% down payment). The down payment can be from a gift, grant or HOC’s Closing Cost and Down payment Assistance Program.
  • Minimal Borrower Contribution.
  • Reduced mortgage insurance
  • 30-Year Fixed Rate with Zero Points

Conventional loans have lower mortgage insurance (MI). FHA insured loans require upfront MIP (mortgage insurance premium) along with monthly mortgage. FHA requires a 3.5% minimum down payment.

2. Who can apply for a Conventional loan?

Borrowers must be first-time homebuyers. Eligible borrowers must have incomes that meet the requirements of HOC MPP income guidelines. The gross annual household income for borrower(s) cannot exceed the limit shown.

3.  What is the minimum FICO (Credit) score allowed/required for Conventional financing?

Minimum FICO (Credit) score is 640 with up to 50% Maximum Debt to Income Ratio.

4. Can I purchase anywhere in Maryland?

No, properties must be located in Montgomery County, Maryland. The sales price limit cannot exceed the HOC MPP Sales Price limit of $596,000 with a Maximum Loan Amount of 424,100. The loan must be used toward the purchase of a primary residence, which must be owner-occupied by the borrower. Investment or vacation properties are not allowed.

5. What type of mortgage is the Conventional product?

The Conventional loan is a fully-amortizing mortgage, with a term of 30 years with zero points.

6. How do you apply for a Conventional loan?

The Conventional loan will be offered through the HOC Participating Lenders. Contact one of the lenders to apply.

7. Conventional financing mortgage insurance (MI). How can this be paid?

HOC will allow the mortgage insurance (MI) to be paid:

  • Borrower Paid Mortgage Insurance (MI)
    • Monthly
    • One time Up-Front Premium paid at closing or added to the loan amount
  • Seller Paid

8. What are mortgage insurance requirements?

Borrowers must pay Mortgage Insurance which insures the mortgage loan in the case of default or foreclosure. The amount of mortgage insurance is determined by the amount of the down payment; the higher the down payment the lower the mortgage insurance. Your lender will review Mortgage Insurance requirements with you.

9. What type of homebuyer education/counseling is required for this program?

All homebuyers must attend a minimum of a 3-Hour Homebuyer Education Class. Follow HOC’s established policy on homebuyer education and counseling.

10. Can this loan be used to purchase a condo?

Yes, however, the condominium development must be approved by Fannie Mae, AND 5% down payment is required. Your lender will be able to determine through contact with Fannie Mae if the condominium is approved.

11. Are any property types not eligible for Conventional financing?

Manufactured homes and co-ops are not eligible property types.

12. What are down payment requirements?

Depending on the mortgage insurance company, some borrowers may be required to use their own funds towards the down payment. In some cases, borrowers who do not have funds saved for a down payment may utilize the HOC Down Payment and Closing Cost Assistance Programs. The minimum down payment may vary depending on the Mortgage Insurer. A HOC Participating Lender will determine the minimum down payment requirement for you.