What is a Conforming Loan?
A conforming loan is a mortgage loan that conforms to GSE (government-sponsored enterprises, such as Fannie Mac, Freddie Mac) guidelines.
In general, any loan which does not meet guidelines is a non-conforming loan. A loan which does not meet guidelines specifically because the loan amount exceeds the guideline limits is known as a jumbo loan.
Conforming loan limit for a single-family home for 2010 is $417,000.
Fannie Mae is authorized by the United States Government to purchase residential mortgage loans. Fannie Mae worked with Freddie Mac to develop uniform mortgage documents and national standards for what would come to be known as a conforming loan.
Fannie Mae and Freddie Mac are continuously in the market to buy conforming loans to repackage into the secondary market, therefore, conforming loans benefit from greater liquidity than non-conforming loans.
The Office of Federal Housing Enterprise Oversight (OFHEO) set the criteria on what constitutes a conforming loan limit that Fannie Mae and Freddie Mac can buy. Criteria include debt-to-income ratio limits, documentation requirements, and maximum loan amount is set based on changes in median home price.
The most popular loan product is the 30-year fixed mortgage with the 15-year fixed in second place. The 15-year mortgage saves the borrower thousands in interest over the life of the loan.
| Year | High Cost Area | |||||
|---|---|---|---|---|---|---|
| Single Family | Two Family | Three Family | Four Family | Second Loan | Single Family | |
| 2009 | $ 417,000 | $ 533,850 | $ 645,300 | $ 801,950 | $ 208,500 | $ 625,500 |
| 2008 | $ 417,000 | $ 533,850 | $ 645,300 | $ 801,950 | $ 208,500 | $ 625,500 |
| 2007 | $ 417,000 | $ 533,850 | $ 645,300 | $ 801,950 | $ 208,500 | $ 625,500 |
| 2006 | $ 417,000 | $ 533,850 | $ 645,300 | $ 801,950 | $ 208,500 | $ 625,500 |
| 2005 | $ 359,650 | $ 460,400 | $ 556,500 | $ 691,600 | $ 179,825 | $ 539,475 |
| 2004 | $ 333,700 | $ 427,150 | $ 516,300 | $ 641,650 | $ 166,850 | $ 500,550 |
| 2003 | $ 322,700 | $ 413,100 | $ 499,300 | $ 620,500 | $ 161,350 | $ 484,050 |
| 2002 | $ 300,700 | $ 384,900 | $ 465,200 | $ 578,150 | $ 150,350 | $ 451,050 |
| 2001 | $ 275,000 | $ 351,950 | $ 425,400 | $ 528,700 | $ 137,500 | $ 412,500 |
| 2000 | $ 252,700 | $ 323,400 | $ 390,900 | $ 485,800 | $ 126,350 | $ 379,050 |
| 1999 | $ 240,000 | $ 307,100 | $ 371,200 | $ 461,350 | $ 120,000 | $ 360,000 |
| 1998 | $ 227,150 | $ 290,650 | $ 351,300 | $ 436,600 | $ 113,575 | $ 340,725 |
| 1997 | $ 214,600 | $ 274,550 | $ 331,850 | $ 412,450 | $ 107,300 | $ 321,900 |
| 1996 | $ 207,000 | $ 264,750 | $ 320,050 | $ 397,800 | $ 103,500 | $ 310,500 |
| 1995 | $ 203,150 | $ 259,850 | $ 314,100 | $ 390,400 | $ 101,575 | $ 304,725 |
| 1994 | $ 203,150 | $ 259,850 | $ 314,100 | $ 390,400 | $ 101,575 | $ 304,725 |
| 1993 | $ 203,150 | $ 259,850 | $ 314,100 | $ 390,400 | $ 101,575 | $ 304,725 |
| 1992 | $ 202,300 | $ 258,800 | $ 312,800 | $ 388,800 | $ 101,150 | $ 303,450 |
| 1991 | $ 191,250 | $ 244,650 | $ 295,650 | $ 367,500 | $ 95,625 | $ 286,875 |
| 1990 | $ 187,450 | $ 239,750 | $ 289,750 | $ 360,150 | $ 93,725 | $ 281,175 |
| 1989 | $ 187,600 | $ 239,950 | $ 290,000 | $ 360,450 | $ 93,800 | $ 281,400 |
| 1988 | $ 168,700 | $ 215,800 | $ 260,800 | $ 324,150 | $ 84,350 | $ 253,050 |
| 1987 | $ 153,100 | $ 195,850 | $ 236,650 | $ 294,150 | $ 76,550 | $ 229,650 |
| 1986 | $ 133,250 | $ 170,450 | $ 205,950 | $ 256,000 | $ 66,625 | $ 199,875 |
| 1985 | $ 115,300 | $ 147,500 | $ 178,200 | $ 221,500 | $ 57,650 | $ 172,950 |
| 1984 | $ 114,000 | $ 145,800 | $ 176,100 | $ 218,900 | $ 57,000 | $ 171,000 |
| 1983 | $ 108,300 | $ 138,500 | $ 167,200 | $ 207,900 | $ 108,300 | $ 162,450 |
| 1982 | $ 107,000 | $ 136,800 | $ 165,100 | $ 205,300 | $ 107,000 | $ 160,500 |
| 1981 | $ 98,500 | $ 126,000 | $ 152,000 | $ 189,000 | $ 98,500 | $ 147,750 |
| 1980 | $ 93,750 | $ 120,000 | $ 145,000 | $ 180,000 | N/A | $ 140,625 |
| Limits for Alaska, Hawaii, Virgin Islands and Guam are 50% higher. Virgin Islands was designated a high cost area in 1992 and Guam in 2001.
Prior to 1984, second mortgage limits were the same as first mortgage limits. Subsequent legislation reduced the limits to 50% of first mortgage limits. Fannie Mae had no second mortgage program before 1981. |
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