Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two corporations purchase mortgage loans complying with the guidelines from the mortgage lending institutions, packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrow credit and income requirements, down payment, and suitable properties.
Maximum loan amount: The maximum loan amount allowed for conventional conforming loans varies from county to county. The highest maximum conventional conforming loan right now is $726,525. The lowest maximum in any county is $484,350. To see what the limit is in the county in which you’re interested, visit the following site https://www.efanniemae.com/sf/refmaterials/loanlimits/. This site lists U.S. territories as well as states.