Conforming Loan Limits

Each year, the Federal Housing Finance Agency (FHFA) sets new baseline loan limits for various types of home loans to reflect the average home price in the U.S. Conventional loans, also known as conforming loans, are guaranteed by Fannie Mae and Freddie Mac and make up most of the loans in the U.S. As you can imagine, some home buyers may seek a loan above the conforming limits. In these cases, they may qualify for a non-conforming loan, known as a jumbo loan. Another common type of home loan is an FHA government loan (Federal Housing Administration).

Conforming Loans and High-Balance Loans

High-balance loans are conforming loans in designated high-cost counties where higher loan limits apply. Conforming loans are designed for homebuyers who meet Fannie Mae and Freddie Mac guidelines. They apply to mortgages within the baseline loan limit. Most importantly, there are benefits to conforming loans that may include lower mortgage rates and a lower down payment.

2026 Conforming Loan Limits

In Most States and Counties (Baseline):

• 1-Unit: $832,750
• 2-Unit: $1,066,250
• 3-Unit: $1,288,800
• 4-Unit: $1,601,750

Some areas of the U.S. have loan limits that are set at a higher amount since the average home prices are significantly higher in those areas.

In High-Cost Areas:

• 1-Unit: $1,249,125
• 2-Unit: $1,599,375
• 3-Unit: $1,933,200
• 4-Unit: $2,402,625

How does this affect Prospective or Former Home Buyers?

Conforming loans are advantageous for those who qualify, as they provide many long-term financial benefits. Therefore, it is essential to know whether you qualify for this type of mortgage. If you are a previous home buyer and had to take out a jumbo mortgage loan because you were over the conforming loan limits, this may be a great time to refinance if your loan now falls under the new limits. Alternatively, if you currently have an FHA loan, you may want to investigate refinancing in the event you now qualify for a conventional loan. If you are a first time home buyer, the increase in conforming loan limits is another positive check mark as to why it is time to buy your first home! Regardless of your situation, if you are looking to purchase, refinance, or just inquire about the positive changes for home loans, you should reach out to a trusted loan officer to further inquire.

What if I don’t qualify for a Conforming Loan?

Many reasons can prevent a home buyer from qualifying for a conforming loan. These include loan amounts above conforming limits, credit issues, and down payment requirements. In most of these cases, they likely have alternative options. For instance, if the loan amount exceeds the conforming loan limit, they may instead qualify for a jumbo mortgage. Because non-conforming jumbo loans are considered riskier for lenders, they often require a heftier down payment, higher mortgage rate, and more stringent credit qualifying criteria. On the other hand, if the buyer does not qualify for a conforming loan based on other circumstances, they may qualify for an FHA loan. FHA loans are government-based loans that have more lenient credit requirements and require as little as a 3.5% down payment. As with conforming loans, FHA loans also have a limit that rises each year.

If you are interested in taking out a home loan or refinancing your current loan, be sure to contact a loan officer today!

FAQs for Conforming Loan Limits

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