A conforming loan typically refers to a loan that conforms to the government service standards as determined by Fannie Mae & Freddie Mac. These two government agencies, set up in the early 1940’s, were established to help people finance new homes.

Because they adhere to the underwriting requirements for credit and income set by FNMA and FHLMC they are considered lower risk and are more easily sold to investors, in bulk, on the secondary market. The Federal Housing Finance Agency (FHFA) publishes annual conforming loan limits that apply to all conventional mortgages. They are categorized as either general loan limits or high cost area loan limits. High cost area loan limits vary by geographical area. General conforming loan limits for 2022 are:

• One-unit properties: $647,2000
• Two-unit properties: $828,700
• Three-unit properties: $1,001,650
• Four-unit properties: $1,244,850