Conforming loan

What Is a Conforming Loan?

What Is a Conforming Loan?
A conforming loan is a mortgage that meets the dollar limits set by the Federal Housing Finance Agency (FHFA) and the funding criteria of Freddie Mac and Fannie Mae. For borrowers with excellent credit, conforming loans are advantageous due to their low interest rates.
Fannie Mae and Freddie Mac do not issue mortgages themselves. Instead, they insure mortgages issued by lenders, such as banks, and act as secondary market makers if lenders wish to sell those mortgages.

Conforming Loan

The Federal National Mortgage Association (FNMA, or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac) are government-sponsored entities that drive the market for home loans. These quasi-governmental agencies have created standardized rules and guidelines to which mortgages for one-unit properties (single-family dwellings) must conform if eligible for the agencies’ backing..

  • Low down payments
  • Low closing costs
  • Easy credit qualifying

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