What Is a Conforming Loan?

Differences Between Conforming and Nonconforming Mortgages

A conforming loan is a mortgage that meets the requirements established by the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac.

These requirements include limits on the loan amount, your debt-to-income ratio, and your loan-to-value ratio. There are also credit score, financial, and documentation standards you’ll need to meet to get approved for a conforming mortgage.

What Are the Benefits of a Conforming Loan?

Lenders often prefer conforming loans and frequently offer you lower mortgage interest rates when you qualify for them. The reason lenders like conforming loans is because they are eligible for purchase by Fannie Mae and Freddie Mac. By selling loans to these enterprises, lenders can get money to offer new loans to more customers. Learn about Fannie Mae and Freddie Mac.

What Are the 2024 Conforming Loan Limits?

In 2024, $766,550 is the limit on conforming loans for most areas of the United States. Certain high-cost areas have higher limits, which can range from $800,000 up to $1,149,825. Loan limits are typically set at the county level. To look up the 2024 limits in your county, see the Federal Housing Finance Agency’s loan limit map.

What Is a Nonconforming Loan?

A nonconforming loan often means a mortgage that exceeds limits set for conforming loans. When you want to finance a house for more money than these limits, you, typically, have to apply for a jumbo loan.

A nonconforming loan may also mean that the mortgage does not meet other credit, income, or financial standards that are required of conforming loans.

Are Conforming Loans and Conventional Loans the Same Thing?

No, they aren’t the same thing. All conforming loans are Conventional loans. However, Conventional mortgages can be either conforming or nonconforming, depending on their terms and conditions.