Conforming Loans

Conforming Loans:

Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. When the investment community buys Mortgage Backed Securities (MBS's), they in essense fund the mortgage loans FNMA and FHLMC purchase from lending institutions.  Every year, from October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan amount.

Conforming Loan Limits:

Number of Units Maximum original principal balance Alaska, Guam, Hawaii, and U.S. Virgin Islands only
1 $417,000 $625,500
2 $533,850 $800,775
3 $645,300 $967,950
4 $801,950 $1,202,925

NOTE: The conforming loan limit in Alaska, Hawaii, Guam and the Virgin Islands is 50% higher.

Conventional conforming loans come in the following terms:

Fixed Interest Rate Terms:

30 year; 25 year; 20 year; 15 year; 10 year;

Adjustable Rate Terms (ARM's):

5/1 fixed period ARM; 7/1 fixed period ARM; 10/1 fixed period ARM