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A conforming loan is a type of mortgage that meets specific rules set by the government-backed agencies Fannie Mae and Freddie Mac. The most important rule is the loan limit—how much money you can borrow. In most areas for 2025, the limit is $806,500, though it's higher in more expensive zip codes. To qualify, you usually need a decent credit score (620 or higher), a steady income, and a manageable amount of debt compared to your income. These loans also require a down payment, often between 3% and 5%. Because they follow strict guidelines, conforming loans often come with lower interest rates than other types, like jumbo loans. This makes them a popular and affordable choice for many homebuyers.
The Federal National Mortgage Association (FNMA, or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac) are government-sponsored entities that drive the market for home loans. These quasi-governmental agencies have created standardized rules and guidelines to which mortgages for one-unit properties (single-family dwellings) must conform if eligible for the agencies’ backing. Fannie Mae and Freddie Mac do not issue mortgages themselves. Instead, they insure mortgages issued by lenders, such as banks, and act as secondary market makers if lenders wish to sell those mortgages.
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USDA RD LOAN
CONVENTIONAL LOAN
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