Why Do Fannie Mae and Freddie Mac Matter?
They purchase mortgages from lenders in the secondary mortgage market.
That helps create liquidity, allowing lenders to make additional loans.
What Makes a Loan Conforming?
Factors can include:
- Loan amount
- Credit
- Income/documentation
- Debt ratios
- Property type
- Occupancy
- Appraisal
- Other underwriting requirements
What Is the Conforming Loan Limit?
The Federal Housing Finance Agency sets limits annually.
Limits can change and high-cost areas may have different thresholds.
Do not hard-code a specific current limit permanently into a guide. Check the current conforming loan limit with the FHFA or your lender when you are comparing financing.
Why Does It Matter to Buyers?
Loans above the conforming threshold may require jumbo/non-conforming financing.
That can mean different:
- Rates
- Reserves
- Documentation
- Down payment
If a purchase is anywhere near the conforming threshold, the loan size decision can change the whole program. See What Is a Jumbo Mortgage? and What Is a Non-Conforming Mortgage? for what sits above the line.
How Lisa Helps
Conforming eligibility is a lender determination based on current limits and standards.
Lisa helps on the property side: making sure the purchase price, property type and appraisal strategy line up with the loan structure your lender approves, and flagging when a listing may push into jumbo territory before you fall in love with it.
Use a free Property DNA report to research a specific property, and talk with Lisa about the search.
