Conforming loan
A conventional loan that meets Fannie Mae and Freddie Mac guidelines, including a maximum loan size set each year by the FHFA. The limit is higher in high-cost counties. Loans above it are jumbo loans.
Also called: conforming mortgage, conforming loan limit
Related terms
A mortgage not insured or guaranteed by a government agency such as FHA, VA or USDA. Most follow Fannie Mae and Freddie Mac rules and require private mortgage insurance when the down payment is under 20%.
A mortgage larger than the conforming loan limit for the area, so it cannot be sold to Fannie Mae or Freddie Mac. Lenders often require higher credit scores, larger down payments and more reserves.
The loan amount divided by the property's value or price, whichever is lower, as a percentage. Lower LTV means less risk for the lender and often better pricing; above 80% usually triggers mortgage insurance on conventional loans.
The lender's review of your income, assets, credit and the property to decide whether to approve the loan. The underwriter often asks for more documents before issuing final approval.
The bank, credit union or mortgage company that provides the loan money. The lender sets the rate and terms, underwrites the loan and holds or sells it after closing.