Conforming Loan Limits: What You Need to Know!

Learn about the loan limit for your area.

Fannie Mae graphic with family in the back groundIf you are looking for a mortgage loan, you should know that the conforming loan limit in your area can affect your ability to qualify for a loan. In this article we will discuss the conforming loan limits, what they mean, and what you need to know.

For many borrowers, the conforming loan limit is a key factor in determining the amount of money that they can borrow.

What Is the Conforming Loan Limit 2022?

The conforming loan limit is the maximum mortgage size Fannie Mae and Freddie Mac will buy or guarantee. Conforming loans are mortgages backed by two quasi-government bodies.

Fannie Mae and Freddie Mac are two companies that are backed by the government and help the mortgage industry in the United States. However, they do not lend money to people.

Instead, they acquire mortgages from banks and other originators. This allows lending institutions to write more mortgages and aid more consumers in acquiring homes. Conforming loans are those that are given to customers and then sold to Fannie Mae or Freddie Mac because they meet their underwriting requirements.

The conforming lending limit changes every year to keep up with changes in the average price of a home in the United States.

Each November, the Federal Housing Finance Agency (FHFA), which is in charge of Fannie Mae and Freddie Mac, decides on the annual maximum.

Based on the House Price Index report made by the Federal Housing Finance Board, the FHFA changes the conforming loan ceiling for the following year (FHFB).

Non-conforming mortgage loans are those that surpass the existing lending limit. Jumbo loans are another term for these types of loans.

What is the difference between a conventional loan and a conforming loan?

Even though “conventional loans” and “conforming loans” are often used interchangeably, they are not the same thing.

A "conventional loan" is a mortgage that is not backed or guaranteed by the federal government. A "conforming loan" is a mortgage that meets the standards set by Freddie Mac and Fannie Mae. The terms “conventional loan” and “conforming loan” are used interchangeably throughout this article.

How the limits on conforming loans work in 2022

Very nice homeCounty limits determine conforming loan limits. Most counties have the conforming loan limit. Regional economic disparities might affect the conforming loan limit.

In areas where the median house value exceeds 115 percent of the baseline conforming loan limit, the maximum loan limit is raised. When the average house value exceeds 115 percent of the baseline conforming loan limit.

The Housing and Economic Recovery Act (HERA) sets the maximum amount that can be borrowed as a multiple of the average price of a home in the area. The law set the highest permissible loan rate at 150 percent.

Maximum conforming loan limits are higher in Southern California, South Florida, and the New York City metro area.

Special HERA rules set separate loan limit computations for Alaska, Hawaii, and two U. S. island territories. Guam and the United States Virgin Islands. High-cost locations have greater conforming loan limitations than domestic U. S. restrictions.

In 2022, what is the conforming loan limit?

In the majority of the United States, the conforming loan ceiling for one-unit houses has increased to $647,200 in 2022, from $548,250 in 2021. From the third quarter of 2020 to the third quarter of 2021, house prices will have gone up an average of 18 percent, which is a huge amount.

The 2022 conforming loan limit for most U. S.

  • 1–unit homes: $647,200
  • 2–unit homes: $828,700
  • 3–unit homes: $1,001,650
  • 4–unit homes: $1,244,850

Conventional Loan Limits: How Do They Work?

Conforming loan limits depend on home prices.

The FHFA changes its baseline loan limit every year based on its House Price Index (HPI) report, which shows how much the average price of a home has gone up over the past year.

The average home value rose 7. 42% between 2019 and 2020, according to the FHFA HPI. The conforming loan limit rose 7. 42% from 2020 to 2021. Because home prices rose quickly in 2021, the FHFA raised the conforming loan limit for 2022 by 18%.

Conforming loans are good for consumers because their interest rates are usually lower than those of other types of loans that don't conform.

If you wish to buy a house that costs more than your area's conforming loan limit, a larger down payment may allow you to avoid a jumbo loan.

High-Cost Area Conforming Loan Limit

State and county home values vary widely. It's impossible to compare property prices in rural Ohio to those in Manhattan, one of the country's priciest real estate markets.

The FHFA limits conforming loans in high-cost areas based on median property values.

The conforming loan limit varies by region, up to 150% of the baseline amount. 2022 is $970,800. FHFA's interactive map shows county limits.

High-Cost Area Limits Example

Consider buying a $700,000 California home. San Bernardino County is not an FHFA high-cost region, so you would likely need a jumbo loan to buy a home there. In San Diego County, the conforming loan ceiling is $879,750, so you can't afford a $700,000 home.

You can get a conforming loan since you're within the county's limit. In Los Angeles County, the conforming loan cap is $970,800. Alaska, Hawaii, Guam, and the U. S. Virgin Islands will have a conforming loan limit of $970,800 in 2022.

The state and county exceptions for Alaska, Guam, Hawaii, and the U. S.

Alaska, Guam, Hawaii, and the U. S.

What You Should Consider Before Borrowing Above The Conforming Loan Limit

If you're considering buying a property outside the conforming loan limits, make sure you can afford a non-conforming loan.

Bigger debt, bigger monthly payment. In expensive areas, consider this. Even with tighter lending, local inventory may exceed the high-cost loan ceiling.

The maximum loan amount that can be made in San Francisco is $970,800, but the average list price is $1,000,000. Due to high prices, you might need a jumbo loan. Describe a jumbo loan. Initial payments are difficult for many borrowers. Conforming loans allow 3% down, but jumbo loans require 20%.

They must have a credit score in the 700s and a DTI below 45%. If you meet these requirements, consider a jumbo loan. Before you buy, you should know the loan limits in your area and the difference between conforming and non-conforming loans.

Easy way to find the loan limit in your area

Loan limit lookup graphicYou can see if your county exceeds the standard lending limit with this link: Mortgage Limits. Choose the Fannie/Freddie with the Limit Type. Also, select the state and make sure the year is correct; and click submit. A table will be presented that lists all the state's county limits.

Conforming Loan Limits FAQs

Purchase A Home with a Conforming Loan

The Conforming loan program provides many advantageous alternatives for homebuyers. From first-time buyers to experienced investors. Conforming loans include favorable interest rates and terms.

For a conforming loan, you can put as little as 3% of the purchase price down, and the loan process is very quick. If the buyer and seller are both in a hurry to close, the closing can happen in two to three weeks.

Another good thing about the conforming loan program is that you might be able to get out of having to pay for an appraisal. This saves money and, if approved, speeds up the process a lot.

Rotating question markFAQs

Do conform loan limits change over time?

Yes, FHFA officials change the limits on conforming loans every year to keep up with the growth in the median house value. Conforming loan limitations alter every January 1 and remain the same for the year.

Is there a way to avoid the conforming loan limits?

To avoid a jumbo loan, you have two options. Take out a second mortgage or pay more down.


In conclusion, it is important to be aware of the changes to the conforming loan limit so that you can take the necessary steps to purchase or refinance a home before the end of the year. If you have any questions about how these changes may impact you, please consult with a qualified mortgage professional.