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What is the difference between a conforming and jumbo loan?

April 26, 2017conforming Jumbo loan

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What is the difference between a conforming and jumbo loan?

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Conforming loans have a well-established secondary market which are provided by the two government sponsored entities, Freddie Mac and Fannie Mae. A jumbo loan is any loan that exceeds the conforming loan amounts shown below.

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Conforming loans have a well-established secondary market which is provided by the two government sponsored entities, Freddie Mac and Fannie Mae. A jumbo loan is any loan that exceeds the conforming loan amounts and the rates for these loans are typically higher than for conforming loans.

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Fannie Mae and Freddie Mac set the underwriting standards for “conforming” loans, the first of which is a maximum loan amount. The loan limit for the Washington DC Metropolitan area is currently $417,000. Loans exceeding that amount are “jumbo” or “non-conforming” loans. Back to top.