Mortgage glossary
Conforming loan limit
Definition: The conforming loan limit is the maximum loan amount Fannie Mae and Freddie Mac will purchase, set yearly by the Federal Housing Finance Agency, with higher limits in designated high-cost counties.
Loans at or below the limit are conforming and follow Fannie Mae or Freddie Mac guidelines. Loans above it are jumbo loans with their own rules. In high-cost areas, a higher "high balance" limit applies. The FHFA announces new limits each year, usually in late fall.
The limit matters because conforming loans often come with more flexible down payment and credit options than jumbo loans. For Austin area buyers near the line, adjusting the down payment slightly can keep a loan conforming. Check the current year's limit for your county before you shop.
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Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
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