Definition
The conforming loan limit ($832,750 for a one-unit home in most areas in 2026) is the maximum Fannie Mae and Freddie Mac will purchase. It varies by location and property type. Exceed it and you need a jumbo loan at higher costs. High-cost areas have higher limits.
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Conforming loan limits are set each year by FHFA (Federal Housing Finance Agency) from the change in average U.S. home prices. Properties in high-cost areas have higher limits; in 2026 the one-unit limit tops out at $1,249,125 in the highest-cost areas (Alaska, Hawaii, Guam and the U.S. Virgin Islands have higher limits). Conforming loans qualify for better interest rates and terms because they can be sold to Fannie Mae/Freddie Mac, while jumbo loans carry higher rates due to increased risk and reduced secondary market liquidity.
Pro Tip
If you're close to the conforming limit, consider the rate difference; sometimes a lower conforming loan with larger down payment beats a jumbo loan.
Example
In most areas, a $750,000 loan on a one-unit home is under the 2026 limit and can be sold to Fannie Mae or Freddie Mac; a $900,000 loan on a one-unit home in the same area is a jumbo loan, with its own rate and stricter requirements.