What are Conforming Loans?

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When it comes to home financing, there are a lot of options for borrowers! Even though a wide variety of programs creates more opportunities for homebuyers, it can be tricky to sparse through them all to find the best fit for your needs. To help you on your mortgage journey, let’s look at what conforming loans are.

What are Conforming Loans?

A conforming loan is a type of mortgage that meets certain requirements set by Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs). These requirements include a minimum credit score and a capped limit on how much money a borrower can borrow from their lender.

What Defines a Guaranteed Loan?

When GSEs guarantee a loan, they are essentially promising to pay back the money if the borrower defaults or misses their payments. This promise reduces the amount of risk a lender takes on by issuing the mortgage, such as losing money. With this promise, lenders offer conforming loans at lower interest rates for borrowers.

What are Conforming Loan Limits?

The conforming loan limits are adjusted each year to reflect the changes in the average American home price. This year, the loan limits increased by 5.2% when compared to 2024.

The 2025 conforming loan limits are as follows:

• 1-unit: $806,500
• 2-unit: $1,032,650
• 3 unit: $1,248,150
• 4 unit: $1,551,250

Is a Conforming Mortgage Right for You?

Whether you’re interested in a conforming mortgage or another home financing solution, connecting with one of our Licensed Loan Originators is the best way to get started! They’re more than just experts; they’re dedicated to providing the best service to their borrowers. Ready to get started? Contact us today!