A conforming loan is one that meets the standards of loan guidelines established by government-sponsored enterprises Freddie Mac and Fannie Mae. The most well-known conforming loan guideline is the size of the loan. There are two different types of conforming loan size limits: standard and high-cost area. Most counties in the United States have a conforming loan limit of $417,000 for a one-unit property. However, there are high-cost areas of the country that have loan limits up to $721,050. Most high-cost areas have maximum loan limits around $625,500. Conforming loans must also meet other guidelines related to a borrower's loan-to-value ratio, debt-to-income ratio, credit score and history, documentation requirements, etc.
Conforming loans usually have lower interest rates than non-conforming loans because they are easily bought and sold on the secondary mortgage market. They tend to be a less risky investment for lenders.
If you are in need of a large loan amount you may need a jumbo loan. A jumbo loan is a non-conforming loan because it exceeds the county's general or high-loan limit. In most areas of the country that would mean a loan amount of more than $417,000 but in high cost areas, it could be for a loan that is more than $721,050.
If you don't qualify for a conforming loan, getting an FHA loan might also be a good alternative because their loan limits vary by county. You can shop for live, customized conforming, jumbo and FHA loan quotes on Zillow Mortgage Marketplace.