Conforming Loan

Definition: A conforming loan is a conventional mortgage that meets applicable Fannie Mae or Freddie Mac eligibility requirements, including the relevant loan limit.

Example

A lender originates a conventional mortgage within the applicable limit and underwriting rules for sale to a government-sponsored enterprise.

Keep the distinction clear

Conforming and conventional are not synonyms. A conventional loan can be nonconforming, including because of its size; limits and eligibility rules can change.

Related terms

Conventional Loan · Fannie Mae · Freddie Mac

Keep studying

Primary and Secondary Mortgage Markets: Fannie Mae, Freddie Mac, and Ginnie Mae

References: Fannie Mae: role in housing finance · Freddie Mac: role in housing finance

Pronunciation (US): kuhn-FOR-ming lohn (capitals show stress)

Pronunciation reference: Merriam-Webster