Conventional 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. Every year, form October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.

Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.

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.

While Fannie Mae (FNMA) and Freddie Mac (FHLMC) have a uniform set of guidelines, loan providers can vary widely in their approval guidelines and pricing for Conforming Loan products.  Lenders add their own additional guidelines (often called "overlays") that impose additional restrictions on borrowers.  These additional restrictions can prevent borrowers from being approved with some lenders even though they would be considered well qualified by others.  Trustpoint Mortgage loan officers work with multiple lenders and are experts on these additional guidelines.  This allows us to not only shop the best price for our clients, but also to place them with the lender whose guidelines are not in conflict with any challenges they may have in qualifying.