Definition
Conforming loans meet Fannie Mae and Freddie Mac size and quality requirements, allowing lenders to sell them in the secondary market. This makes them easier to fund and typically results in better rates. Non-conforming loans (jumbo, subprime) don't meet these criteria.
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Conforming loans must be below the annual conforming loan limit ($832,750 for a one-unit home in most areas in 2026) and meet strict underwriting standards. These loans are more easily sold and typically have better rates. Non-conforming loans (jumbo, subprime) don't meet these criteria.
Pro Tip
Staying under the conforming loan limit typically means better interest rates due to easier secondary market sales.
Example
A $600,000 mortgage on a primary residence meets conforming standards and can be sold to Fannie Mae, allowing the lender to offer better rates.