Conforming Loans

Conforming Loans:

Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year in October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan based on mean home price.

Buying back mortgage loans allows these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming to repackage into the secondary market—effectively decreasing the demand for non-conforming loans.

Conforming Loan Limits:

Number of Units Maximum original principal balance Alaska, Guam, Hawaii, and U.S. Virgin Islands only
1 $647,200 $970,800
2 $828,700 $1,243,050
3 $1,001,650 $1,502,475
4 $1,244,850 $1,867,275

NOTE:

  • The conforming loan limit in Alaska, Guam, Hawaii, and the Virgin Islands is 50% higher.
  • In most of the U.S., any loan amount over $647,200 for one-unit properties is considered a jumbo loan.
  • Visit the Federal Housing Finance Agency site to download an updated list of 2022 conforming loan limits for all counties and county-equivalent areas in the U.S.