Conforming loans meet lending guidelines set by government-backed programs like the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac.
Jump to insightThese types of loans have a maximum loan limit and minimum borrower requirements.
Jump to insightConventional conforming loans allow down payments as low as 3% through certain programs.
Jump to insightHow does a conforming loan work?
A conforming loan is a mortgage that meets specific guidelines set by government-backed programs such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac). These guidelines include maximum loan amounts and minimum borrower requirements. Conforming loans must meet minimum requirements to be deemed safe investments for individuals and institutions.
The Federal Housing Finance Agency (FHFA) sets the maximum amount for conforming loans backed by Fannie Mae and Freddie Mac. FHFA conforming loan limits are updated annually to reflect changes in national home prices.
“The federal government, via the FHFA, created and oversees Fannie Mae and Freddie Mac, which regulate a standard of guidelines, regulations and limitations, as well as [purchase] mortgage loans that other banks and lenders originate,” said Brian Kimball, a senior mortgage advisor at Waterstone Mortgage in Knoxville, Tennessee.
Fannie Mae and Freddie Mac support the secondary mortgage market by buying individual mortgages and pooling them to create mortgage-backed securities (MBSs). Fannie Mae purchases conforming mortgages from larger commercial banks, while Freddie Mac buys them from smaller regional banks and credit unions.
By purchasing mortgages, Fannie Mae and Freddie Mac provide mortgage lenders with liquidity, enabling them to continue lending.
Conforming loan limits and criteria
Conforming loans are subject to strict limitations set by government-backed programs. For instance, the FHFA sets the maximum loan limits for Fannie Mae and Freddie Mac, while the programs themselves set the borrower requirements.
Maximum loan amount
For 2026, the FHFA conforming loan limit is $832,750 for single-unit properties in most areas. Borrowers in certain high-cost-of-living areas can borrow up to 150% of that baseline limit. For example, in San Francisco or New York City, the one-unit conforming loan limit reaches up to $1,249,125.
Maximum conforming loan limits change annually and vary by location and number of units.
Federal Housing Administration (FHA) loans have separate limits that also change annually. You can view current limits on the U.S. Department of Housing and Urban Development’s (HUD) FHA Mortgage Limits page.
Loan-to-value ratio
Conforming loans from Fannie Mae and Freddie Mac allow for a maximum loan-to-value (LTV) ratio of 97%, meaning home buyers can finance up to 97% of the home's value. FHA loans can allow up to 96.5% financing, which is why the required down payment is often 3.5%.
Debt-to-income ratio
Conforming loans from Fannie Mae and Freddie Mac generally have a maximum borrower debt-to-income (DTI) ratio of 45%. A lender may accept a higher DTI ratio if the borrower has strong compensating factors, such as substantial cash reserves.
For FHA loans, the requirements typically vary by lender. Many lenders are flexible and allow higher DTI ratios.
Credit score
Fannie Mae removed its hard minimum credit score floor for eligibility in late 2025, but Fannie Mae and Freddie Mac typically look for a minimum credit score of 620 for fixed-rate conforming loans.
FHA loans are more flexible; they allow credit scores as low as 580 for up to 96.5% financing, or as low as 500 with 10% down.
Down payment
For FHA loans, borrowers are typically required to put down 3.5% to 10% of the purchase price, depending on their credit score. For conventional conforming loans from Fannie Mae and Freddie Mac, borrowers can put down as little as 3%.
Property requirements
Conforming loans typically require that the property meet basic appraisal and safety standards, as well as any program-specific property rules.
Pros and cons of conforming mortgages
A conforming mortgage is a common type of home mortgage for first-time homebuyers and buyers purchasing single-family homes. But these loans aren’t suitable for every situation. Here are the pros and cons of using a conforming mortgage compared to a conventional mortgage:
Pros
- Potentially lower interest rates
- Down payments as low as 3% for some programs
- Lower minimum credit score requirements
Cons
- Can’t exceed conforming loan limits
- Less flexible than many nonconforming options
- Must meet lender’s set requirements
» MORE: What is a conventional mortgage?
What to look for in a conforming loan lender
Because they follow baseline guidelines, you might assume all lenders offer the same options. When shopping for a conforming loan lender, it’s important to consider a few factors.
Reputation
Good lenders should have a strong track record. Research lenders and look at recent customer reviews online. If you find that a lender has numerous complaints in online reviews and poor responses to disputes, it may be best to avoid it.
Mortgage rates
While mortgage rates might be similar between most conforming mortgage lenders, it’s best to shop around. Even a small rate difference in your mortgage rate can save you thousands of dollars over the life of the loan.
Fees
There are many required fees with mortgages, but the amount lenders charge can vary significantly. Shop around to find a lender with reasonable fees.
Borrower requirements
While all conforming loans must meet minimum requirements set by the FHA, Fannie Mae and Freddie Mac, some lenders set stricter requirements than the minimum. Make sure you qualify for a lender’s requirements before applying for a loan.
Conforming loans vs. nonconforming loans
Conforming loans must meet the criteria set by government-backed programs. These loans have a maximum borrowing limit and set borrower criteria. Generally, conforming loans have lower down payment requirements, lower interest rates and fewer fees than other types of loans.
Nonconforming loans don’t have to meet these criteria, and they’re typically offered in larger loan amounts, often referred to as jumbo loans. They may require higher credit scores or down payments than conforming loans.
“A nonconforming mortgage is one that either does not comply with the standardized regulations, guidelines and requirements and/or exceeds the maximum loan limit,” Kimball said. “A nonconforming mortgage could not be sold to Fannie Mae or Freddie Mac, and each nonconforming lender is required to create their own set of guidelines and limitations.”
If you need to borrow more than the maximum amount for a conforming loan, or if you need a non-traditional mortgage, getting a nonconforming loan may be your best option.
» MORE: Conforming vs. nonconforming loan: What’s the difference?
FAQ
Are all conventional loans conforming loans?
Yes, all conforming loans are conventional loans, but not all conventional loans are conforming loans. A conforming loan is a loan that meets standards set by a government-backed program like Fannie Mae or Freddie Mac, while a conventional loan is not backed by a specific government program.
Are conforming loans hard to get?
Conforming loans have specific borrower requirements you must meet, but they may actually be easier to get than other types of loans. To qualify for a conforming loan, you must meet the loan’s credit score and DTI requirements.
Can you refinance nonconforming loan into a conforming loan?
You might be able to refinance your nonconforming loan into a conforming loan as long as you meet the minimum criteria. The loan needs to be less than the maximum allowed conforming loan amount, and you need to meet the minimum credit score and other borrower requirements.
How can you confirm if a loan is conforming?
You can confirm whether a loan is conforming by checking whether it’s backed by a government-sponsored program. Most loans you’ll see advertised online by large banks and credit unions are typically not conforming loans. You’ll need to find specific lenders for conforming loans, such as those that work with Fannie Mae, Freddie Mac and the FHA.
How can you get a conforming loan?
To get a conforming loan, first confirm whether you meet the general requirements for government-backed loans listed above. Then, you can look up conforming loan lenders to see which ones are a good fit for you. You can start by checking out Fannie Mae lenders and Freddie Mac lenders, and by searching HUD’s database for FHA lenders.
Bottom line
A conforming loan is a popular loan type for single-family homes. These loans typically offer lower interest rates and fewer fees than nonconforming loans. You might also qualify for a low down payment if you have a low income or if you’re a first-time homebuyer. Still, conforming loans have maximum loan amounts and might not be the best option for especially large mortgages.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Consumer Financial Protection Bureau, “Conventional Loans.” Accessed July 5, 2026.
- Fannie Mae, “Find a Lender.” Accessed July 5, 2026.
- Fannie Mae, “General Requirements for Credit Scores.” Accessed July 5, 2026.
- Freddie Mac, “Find an Optigo Conventional Lender.” Accessed July 5, 2026.
- Federal Housing Finance Agency, “FHFA Announces Conforming Loan Limit Values for 2026.” Accessed July 5, 2026.
- Federal Housing Finance Agency, “Fannie Mae and Freddie Mac Conforming Loan Limits for Mortgages Acquired in Calendar Year 2026.” Accessed July 5, 2026.
- U.S. Department of Housing and Urban Development, “HUD Lender List Search.” Accessed July 5, 2026.
- U.S. Department of Housing and Urban Development, “FHA Mortgage Limits.” Accessed July 5, 2026.
