Conventional, Conforming Loans


A conventional, conforming loan is a mortgage that conforms to Fannie Mae's/Freddie Mac's loan guidelines and is not directly guaranteed or insured by a government agency such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), the US Department of Agriculture (USDA), etc. The majority of home loans originated in America today are conventional, conforming loans. 

For most of the US, the conforming loan limit is $453,100 (increasing to $484,350 in 2019). There are some high-cost areas around major metropolitan areas, but generally speaking, the maximum loan amount that Fannie Mae and Freddie Mac will lend is $453,100 ($484,350 starting in 2019). Loans above this threshold are called jumbo loans.

Loans that do not conform to Fannie Mae's or Freddie Mac's guidelines for a reason other than the total dollar amount are called "non-conforming" loans. These non-conforming loans are held by mortgage lenders on their own books and called "portfolio" loans. Guidelines for portfolio loans will vary from institution to institution.