A conforming loan is a conventional mortgage that adheres to the standardized underwriting guidelines, credit requirements, DTI caps, and annual dollar limits established by the Federal Housing Finance Agency (FHFA) for purchase by government-sponsored enterprises Fannie Mae and Freddie Mac.
Loans that exceed the FHFA dollar threshold for a given county are categorized as Non-Conforming or Jumbo Loans, which typically require higher credit scores, larger down payments (10-20%), and more extensive cash reserves.