What Does Conforming Loan Mean?
A mortgage that is equal to or less than the dollar amount established by the conforming loan limit set by Fannie Mae and Freddie Mac's Federal regulator, The Office of Federal Housing Enterprise Oversight (OFHEO) and meets the funding criteria of Freddie Mac and Fannie Mae.
Investopedia explains Conforming Loan
The term "conforming" is most often used when speaking specifically about a mortgage amount; however, the terms "conforming" and "conventional" are frequently used interchangeably. Mortgages that exceed the conforming loan limit are classified as non-conforming or jumbo mortgages.
OFHEO, which sets the conforming loan limit on an annual basis, has regulatory oversight to ensure that Fannie Mae and Freddie Mac fulfill their charters and missions of promoting homeownership for lower income and middle class Americans. OFHEO uses the October to October percentage increase/decrease in average housing prices in the Monthly Interest Rate Survey of the Federal Housing Finance Board (FHFB) to adjust the conforming loan limits for the subsequent year.
Loan Limits
Downloadable Documents
Historical Loan Limits
Loan Limit Look-Up Table
Related Links In:
FHFA Press Release: 2009 Conforming Loan Limits
2009 Single-Family Mortgage Loan Limits
The Housing and Economic Recovery Act of 2008 changed Fannie Mae's charter to expand the definition of a "conforming" loan. Effective with the November 2008 release of the conforming loan limits, two sets of limits are provided for first mortgages -- general conforming loan limits, and high-cost area conforming loan limits.
The conforming loan limits apply to all conventional mortgages that are delivered to Fannie Mae on or after January 1, 2009. Please note that the 2009 general conforming loan limits are identical to the 2006, 2007, and 2008 conforming loan limits. The high-cost areas are determined by the Federal Housing Finance Agency. The company may purchase loans up to $625,500 in designated high-cost areas.
| Maximum Original Principal Balance | ||||
|---|---|---|---|---|
| Units | Contiguous States, District of Columbia, and Puerto Rico | Alaska, Guam, Hawaii, and the U.S. Virgin Islands | ||
| - | General | High-Cost* | General | High-Cost* |
| 1 | $417,000 | $625,500 | $625,500 | $938,250 |
| 2 | $533,850 | $800,775 | $800,775 | $1,201,150 |
| 3 | $645,300 | $967,950 | $967,950 | $1,451,925 |
| 4 | $801,950 | $1,202,925 | $1,202,925 | $1,804,375 |
*The limit may be lower for a specific high-cost area; use the Loan Limit Look-Up Table above to see limits by location.
Last Revised: January 12, 2009
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