A conforming loan is a mortgage that meets the dollar limits set by the Federal Housing Finance Agency (FHFA) and the funding criteria of Freddie Mac and Fannie Mae.
Mortgages are not issued by Fannie Mae or Freddie Mac directly. Instead, they serve as secondary market makers and insure mortgages issued by lenders like banks.
The baseline limit is $647,200 for the most of US. The ceiling is higher in high-cost markets is $970,800 or 150% of $647,200. The FHFA adjusts its loan ceilings for every year.
Conforming Loans Offer Greater Consumer Protections And Lower Interest Rates. Many consumers benefit from conforming loan because of the lower fees and stability of loan.