Conforming Loan
A mortgage that meets Fannie Mae and Freddie Mac standards, including FHFA loan size limits.
What is Conforming Loan?
A conforming loan is a residential mortgage that meets the guidelines established by the Federal Housing Finance Agency (FHFA) and is therefore eligible for purchase by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Key criteria for conforming status include loan size limits (the 2024 baseline conforming loan limit is $766,550 for a single-family home in most U.S. counties, with higher limits up to $1,149,825 in high-cost areas), minimum credit score requirements, maximum debt-to-income ratios, and property appraisal standards. Because conforming loans can be sold into the secondary mortgage market to the GSEs, lenders can replenish their capital quickly and offer borrowers lower interest rates than non-conforming (jumbo) loans. Loans exceeding the conforming limit are classified as jumbo loans and typically carry higher rates reflecting increased lender risk.
Example
In 2024, a California homebuyer in a high-cost county can obtain a conforming loan up to $1,149,825 and benefit from competitive rates and lender choice available through the GSE-backed secondary market. A loan exceeding that limit requires a jumbo mortgage with stricter qualification criteria and a higher interest rate.
Source: FHFA — Conforming Loan Limits