What is the difference between a conforming and a non-conforming, jumbo, mortgage?
A conforming mortgage is one that does not exceed the maximum mortgage limit of the two primary Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. The current conforming maximums are: $333,700 for a 1 unit property, $427,150 for a 2 unit property, $516,300 for a 3 unit property and $641,650 for a 4 unit property. These maximums apply to all states except Alaska and Hawaii. There for a jumbo mortgage is one that has a mortgage amount exceeding the aforementioned limits. The interest rates on jumbo mortgages are typically between 1/4- 5/8 % higher than on conforming mortgages.
