Conforming Loans

A conforming loan is a great place to start if you’re looking for a mortgage.

A conforming loan, also known as a conventional loan, is a mortgage loan that has terms and conditions that conform to guidelines set forth by Fannie Mae and Freddie Mac. These two corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, package the mortgages into securities, and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.

Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Both corporations announce new loan limits every year.

The conforming loan limits for first mortgages are:

One-family: $806,500
Two-family: $1,032,650
Three-family: $1,248,150
Four-family: $1,551,250

Generally, any loan that does not meet guidelines is considered a non-conforming loan. One type of non-conforming loan that exceeds the guideline limits is known as a jumbo loan.

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