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Definition
A conforming loan limit is the maximum mortgage amount that Fannie Mae and Freddie Mac will purchase or guarantee. This cap is set annually by the Federal Housing Finance Agency (FHFA), so the dollar figure can change each year based on home-price trends. There's a baseline limit that applies to most of the country, plus higher limits in designated high-cost areas, where the ceiling can rise to as much as 150% of the baseline. The limit may also vary by the number of units in a property. If your loan amount exceeds the applicable conforming limit, it's considered a jumbo loan, which typically carries different qualifying standards and pricing. Knowing the current limit for your county helps you understand whether your financing falls into conforming or jumbo territory and what rules and rates may apply.
Also Known As
Conforming Loan Limit (CLL)
Fannie/Freddie loan limit
FHFA loan limit
GSE loan limit
Used in Context
- Because the home price pushed her loan above the county's conforming loan limit, she had to apply for a jumbo mortgage instead.
- A borrower in a designated high-cost area learned his conforming loan limit was higher than the national baseline.
- When a buyer requested mortgage quotes through Dreamy Leads, lenders checked whether the loan amount fell within the current conforming loan limit.
Who sets the conforming loan limit?
The Federal Housing Finance Agency (FHFA) sets the conforming loan limit annually. It establishes a baseline limit for most of the country and higher limits in designated high-cost areas, where the cap can reach up to 150% of the baseline amount.
What happens if my loan is above the conforming limit?
If your loan amount exceeds the applicable conforming loan limit, it's classified as a jumbo loan. Jumbo loans aren't bought by Fannie Mae or Freddie Mac, so they typically come with different qualifying requirements, documentation, and pricing that vary by lender.
Does the conforming loan limit change every year?
Yes. The FHFA reviews and sets the conforming loan limit annually, so the dollar figure can move up or down based on national home-price trends. Limits also differ for high-cost areas and for properties with multiple units, so check the current figure for your county.
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