What is the difference between a Freddie Mac loan and a conventional loan?

Freddie Mac loans and conventional loans are terms that often get used interchangeably, but they actually represent different concepts within the mortgage lending landscape. A conventional loan is any mortgage that is not insured or guaranteed by a government agency, meaning it is a loan made by private lenders to borrowers based on strict credit and financial criteria. This type of loan is typically divided into two categories: conforming loans and non-conforming loans. Conforming loans meet the guidelines set by government-sponsored enterprises, which include Freddie Mac and Fannie Mae. Freddie Mac loans are specifically conforming loans that adhere to the requirements established by Freddie Mac, also known as the Federal Home Loan Mortgage Corporation. These requirements include specific limits on the loan amount, borrower credit scores, down payment amounts, and debt-to-income ratios. By purchasing these conforming loans from lenders, Freddie Mac provides liquidity and stability to the mortgage market, allowing lenders to offer more favorable terms to borrowers. In essence, while all Freddie Mac loans are conventional loans, not all conventional loans are Freddie Mac loans. When a borrower opts for a Freddie Mac loan, they benefit from potentially lower interest rates and more flexible eligibility requirements, making homeownership more accessible. For additional specific details regarding Freddie Mac products and offerings, interested individuals can visit the official Freddie Mac website for the most current information and guidance.