What is a conforming loan? What is a non-conforming loan?

A conforming loan conforms to the requirements of Fannie Mae and Freddie Mac. Usually, the specific reference is to loan amount. The maximum loan amount for 1997 as specified by Congress for single family loan purchased by either of these two agencies is $227,150. The term also refers to a loan which conforms to all of the other borrower and property requirements of these two agencies.

A non-conforming loan is generally meant to be those loan amounts above $227,150. The term can also refer to those loan programs which allow for different borrower and property characteristics than usually required by Fannie Mae and Freddie Mac.

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