Conforming Loans:
Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, from October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market - effectively decreasing the demand for non-conforming loans.

Conforming Loan Limits:

Conforming loan limits for 2023

Property Type 2023 low-cost area limit   2023 high-cost area limit
Single family home   $726,200  $1,089,300
Two units   $929,850  $1,394,775
Three units   $1,123,900  $1,685,850
Four units   $1,396,800  $2,095,200