Conforming Loan Limits

A conforming loan is one that meets the standards of loan guidelines as established by government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae, meaning Freddie and Fannie can buy loans up to predetermined amount, with that amount adjusted annually. The Housing and Recovery Act of 2008 expanded the definition of "conforming loan" to include two sets of loan limits:

• general conforming limits
• high-cost area conforming limits

As of October 1, 2011, the general conforming limit is $417,000 and the high-cost area conforming limit is $625,500. The cap for high-cost conforming limits varies by county because the maximum loan amount is calculated to be 115 percent of the 2010 area median home price and is not to exceed $625,500, except in Alaska, Hawaii, Guam and the U.S. Virgin Islands, where the cap is 50 percent higher than the limits for the rest of the country.