What is Conforming Loan Limit?
The conforming loan limit is the maximum loan amount that Fannie Mae and Freddie Mac will buy, set each year and adjusted upward for higher-cost areas. Loans at or below the limit are called conforming and usually carry lower rates and easier terms, while loans above it are jumbo loans with stricter requirements. In pricier California counties the limit is higher than the national baseline.
Example: A buyer keeping the mortgage at or under the county's conforming loan limit gets standard pricing, while a neighbor borrowing above it needs a jumbo loan with a larger down payment.