Understanding Conforming Loan Limits

Conforming loans are mortgage loan products that are backed by federal agencies such as the Federal Housing Administration and the Federal National Mortgage Association.

These loans have limits on how much a borrower can borrow, to ensure that lenders don't take on too much risk and that mortgages remain affordable for homebuyers.

What is a Conforming Loan?

A conforming loan is a loan backed by federal agencies such as the Federal Housing Agency or the Federal National Mortgage Association that adheres to certain size limits. Financial institutions may originate these loans in order to reduce the risk and make them more affordable for homebuyers.

The size of a conforming loan is limited by the maximum loan amount established by the government-sponsored enterprise (GSE) and is updated annually.

Factors that Influence Conforming Loan Limits

A variety of factors can affect the conforming loan limits, including changes in housing prices, area wages, and other market forces. Increases in the cost of living or local wages may require an increase in the conforming loan limit to ensure that homebuyers have access to mortgages they can afford.

The Federal Housing Finance Agency (FHFA) reviews mortgage data every year and publishes loan limits accordingly. Loan limits are adjusted on an annual basis and can differ from one county to another throughout the U.S.

To view the most recent conforming loan limit information for your county, please reference the Federal Housing Finance Agency's Conforming Loan Limits Map.

Counties with High Cost Areas and Higher Loan Limits

There are a number of counties throughout the U.S. that have high-cost areas and higher loan limits than most. These counties with higher loan limits can often be much more attractive to homebuyers due to the increased purchasing power they offer.

Some examples include San Diego, Nassau and Westchester counties in New York, as well as Los Angeles and Ventura Counties in California. Prospective homebuyers who are considering these areas should work closely with a lender to understand the exact maximum loan amounts that may be available for their desired property and location.

If you have any additional questions about conforming loans please contact us. Experienced loan originators are standing by to assist you.