Conforming vs Non-Conforming LoansWhen you’re applying for a mortgage, one of the most important distinctions is whether your loan is conforming or non-conforming. This difference affects your interest rate, loan amount, approval process, and even what kind of home you can buy.
In this guide, we’ll explain what each type means, how they compare, and when you should consider one over the other.
What Are Conforming Loans?A Conforming Loan meets the standards set by Fannie Mae and Freddie Mac — including loan size limits set each year by the Federal Housing Finance Agency (FHFA).
Key Features of Conforming Loans:
- Loan limits: up to $766,550 in 2025 for most U.S. counties (higher in high-cost areas, up to $1,149,825)
- Minimum credit score: 620
- Down payment: as low as 3% with programs like Conventional 97
- Lower interest rates compared to jumbo loans
- Easier qualification and more flexible terms
A Non-Conforming Loan does not meet Fannie Mae or Freddie Mac’s guidelines. The most common type is a Jumbo Loan, which is used when the loan amount is higher than FHFA’s conforming limits.
Key Features of Non-Conforming (Jumbo) Loans:
- Loan amounts above $766,550 (or $1,149,825 in high-cost areas)
- Minimum credit score: typically 680–700+
- Down payment: 10–20% or more
- Higher interest rates than conforming loans
- Stricter documentation and possible double appraisals
Feature | Conforming Loan | Non-Conforming (Jumbo) Loan |
| Loan Size | ≤ $766,550 (standard) or ≤ $1,149,825 (high-cost areas) | Above FHFA loan limits |
| Backed By | Fannie Mae & Freddie Mac | Not backed by GSEs |
| Interest Rates | Lower, standardized | Higher, lender-specific |
| Credit Score | 620+ | 680–700+ |
| Down Payment | As low as 3% | 10–20% minimum |
| PMI / Insurance | PMI if <20% down | No PMI, but higher down payment |
| Flexibility | Easier to qualify | Stricter underwriting, more reserves |
Which Loan Should You Choose?
Which Loan Should You Choose?- Conforming Loan: Best if you’re buying a home under FHFA loan limits, want lower rates, and prefer flexible qualification rules.
- Non-Conforming Loan (Jumbo): Best if you’re purchasing a luxury home, high-cost property, or need to borrow more than conforming limits allow.
Why Choose Loan Factory?
Why Choose Loan Factory?At Loan Factory, we help borrowers qualify for both conforming and jumbo loans with the best possible terms:
- MOSO Technology – Compare offers from 240+ lenders instantly.
- Best Price Guarantee – If we can’t beat a competitor’s official offer, we’ll pay you $1,000 cash.
- Programs for Every Buyer – From 3% down conforming loans to multi-million-dollar jumbo financing.
- Expert Guidance – Our loan officers will find the right fit for your financial goals.
Ready to find the right mortgage? Start your home loan with Loan Factory today.
→ Read more: Apply for a Home Loan as a First-Time Buyer: Step-by-Step Guide
FAQ: Conforming vs Non-Conforming Loans
