Conforming Loan Limit

Fannie Mae and Freddie Mac. They sound like nicknames for your ditzy aunt and uncle, who live on a commune near Las Cruces.

In reality, they are two major players in the mortgage industry. These companies are called “government-sponsored enterprises,” or GSEs. Lawmakers set them up to help promote home ownership. Because Congress established them, Fannie Mae and Freddie Mac work within a complicated web of regulation.

Fannie and Freddie have a limit on the size of a mortgage that customers can obtain. The limit is known as the conforming loan limit. Anything above this line is known as a jumbo loan, which would require the borrower to pay higher interest rates. Each year, the regulator for Fannie and Freddie (the Office of Federal Housing Enterprise Oversight, or OFHEO) sets the conforming loan limit. The limit for 2018 was $453,100, in case you were wondering.