A mortgage that meets Fannie Mae and Freddie Mac's guidelines for purchase, including a maximum loan size that is adjusted annually.
Full Definition
Conforming loans 'conform' to the purchasing standards set by Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy mortgages from lenders. The most important standard is the conforming loan limit, which is $766,550 for single-family properties in most of the US in 2024, with higher limits in designated high-cost areas (up to $1,149,825). Loans above these limits are jumbo loans. Because conforming loans can be sold to Fannie/Freddie on the secondary market, lenders take on less risk and can offer better rates. Conforming loan guidelines also cover maximum DTI, minimum credit score, documentation standards, and property eligibility.
Related Terms
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