What Is a Conforming Loan When Buying a House?

All conforming loans are conventional loans, but not all conventional loans are conforming loans.

2025 conforming loan limits

The Federal Housing Finance Agency (FHFA) has set the 2025 conforming loan limit for one-unit properties at $806,500 in most parts of the country. This marks a 5.2% increase from the 2024 limit, reflecting rising home prices nationwide.

Each year, the FHFA adjusts these limits based on changes in the average U.S. home price, using data from the FHFA House Price Index. This helps keep conforming loans aligned with current market conditions.

In high-cost housing markets, where 115% of the local median home value exceeds the baseline limit, the ceiling is set higher. For 2025, the maximum conforming loan limit in these areas is $1,209,750, which is 150% of the baseline.

Maximum Baseline Loan Amount for 2025

Source: Fannie Mae

Certain locations, including Alaska, Hawaii, Guam, and the U.S. Virgin Islands, also qualify for this higher ceiling due to special statutory provisions. In total, conforming loan limits for 2025 increased in all but six U.S. counties.

Conforming loan limit map

To see the conforming loan limit for your county, check out the interactive map below or visit the FHFA’s Conforming Loan Limit (CLL) Values page. You can also download a Microsoft Excel workbook file (.xlsx) that lists the 2025 conforming loan limits for all counties and county-equivalent areas in the U.S.

You can learn about the background of U.S. conforming loan limits and how they are calculated each year on the FHFA’s 2025 Conforming Loan Limit Values FAQ page.

Conforming loan example

Let’s say you decide to purchase a one-unit home in Thomas County, Kansas, for $200,000 with a $30,000 down payment and a conventional loan for $170,000. Because your loan amount is well under the 2025 baseline conforming loan limit of $806,500, it would be considered a conforming loan.

Now, imagine you’re buying a single-family home in Santa Clara County, California, for $1 million. This area qualifies as a high-cost market, with a 2025 conforming loan limit of $1,209,750. A 20% down payment would be $200,000, leaving you with a loan of $800,000, which is still within the conforming limit.

Even if you chose a lower down payment, such as 3% ($30,000), the loan amount would be $970,000, and it would still qualify as a conforming loan because it’s under the county’s limit.

It’s important to note that while conforming loans can allow for down payments as low as 3%, lenders may have specific requirements based on the loan amount and other factors. For high-balance conforming loans, some lenders may require a minimum down payment of 5%.

Conforming loan vs. non-conforming

The main difference between a conforming loan and a non-conforming loan comes down to how much you’re borrowing. If the loan amount exceeds the conforming loan limits set by the FHFA, it’s considered a jumbo loan and doesn’t qualify for purchase by Fannie Mae or Freddie Mac.

Here’s how they compare:

• Loan amount: Conforming loans fall at or below the FHFA limit ($806,500 for most areas in 2025). Jumbo loans exceed that threshold.
• Underwriting requirements: Jumbo loans typically come with stricter qualifications. Lenders may require a higher credit score, larger down payment, and more cash reserves.
• Interest rates: Conforming loans often come with lower interest rates because they can be sold to government-sponsored enterprises. Jumbo loans may carry slightly higher rates, depending on the lender and market conditions.
• Availability and accessibility: Conforming loans are more widely available and accessible for buyers with moderate incomes and strong credit.

Conforming loans vs. non-conforming loans

GSE = government-sponsored enterprises; *based on 2025 FHFA conforming loan limits

Examples of non-conforming mortgage loans:

• Government-backed loans (FHA, VA, USDA)
• Jumbo loans designed for purchasing high-priced luxury houses
• Hard-money loans, offered by individuals or private companies
• Purchase-money mortgages offered by a seller as part of the purchase deal
• Interest-only mortgages, where payments only go toward the loan costs
• Holding mortgages where the seller holds the title

While jumbo loans may be necessary in expensive housing markets, most homebuyers try to stay within conforming limits to access more favorable terms.

Why conforming loans matter to homebuyers

Conforming loans are the most common type of mortgage for a reason — they offer a combination of accessibility, affordability, and stability that’s hard to beat. If you’re buying a home and your loan amount falls within the conforming limits, you may benefit in several ways:

• Lower down payment options: Some conforming loan programs allow down payments as low as 3%, especially for first-time homebuyers or those with lower to moderate incomes.
• More competitive interest rates: Because these loans can be sold to Fannie Mae or Freddie Mac, lenders face less risk and can pass along lower rates to borrowers.
• Easier approval process: The guidelines for conforming loans are well-established, which can simplify the underwriting and documentation process.
• Access to flexible loan programs: Conforming loans come in many forms, including fixed-rate and adjustable-rate options, giving buyers flexibility to choose what fits their budget and timeline.
• Government-backed stability: Fannie Mae and Freddie Mac provide liquidity and stability to the housing market, which helps keep conforming loans widely available even when markets shift.

Not sure what you can afford? Use HomeLight’s free Home Affordability Calculator to estimate your budget based on income, expenses, and loan type.

How to find out if you qualify for a conforming loan

Qualifying for a conforming loan depends on meeting certain criteria related to your income, credit profile, and the home you plan to buy. While exact requirements can vary by lender, here are the general benchmarks:

• Loan amount: Your mortgage must fall within the conforming loan limits for your county — $806,500 in most areas, or up to $1,209,750 in high-cost markets.
• Credit score: Most lenders look for a credit score of at least 620, though higher scores can help you secure better terms.
• Down payment: A minimum down payment of 3% to 5% is typically required for conforming loans, depending on the loan program and your financial profile.
• Debt-to-income (DTI) ratio: Lenders generally prefer a DTI ratio below 43%, which means your total monthly debts (including your future mortgage) shouldn’t exceed 43% of your gross monthly income.
• Employment and income verification: You’ll need to provide recent pay stubs, W-2s, or other documentation to show stable and sufficient income.

The easiest way to find out if you qualify is to speak with a mortgage lender. They can assess your financial situation and help determine whether a conforming loan is a fit, or if you’ll need to consider alternatives like jumbo or government-backed loans.

Ready to find a home? Partner with a top agent

Conforming loans offer favorable terms, broad availability, and lower barriers to entry for many buyers, especially those staying within standard loan limits.

Whether you’re buying your first home or your next one, it helps to have a trusted real estate expert by your side. HomeLight’s Agent Match platform analyzes millions of real estate transactions and thousands of reviews to connect you with top-performing agents in your area.

A great agent can guide you through the mortgage process, help you stay within conforming limits, and find a home that fits your goals and budget.

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