There are a number of standardized programs available to borrowers who are looking to purchase or finance a home for themselves or their families.
Conforming conventional loans are loans that adhere to the standards set by Fannie Mae and Freddie Mac, including maximum loan amounts.
As of 2022, the standard limit for a conforming conventional mortgage loan maximum is $647,200 for a single-family home that you intend to live in. For borrowers in high-cost areas, the limit can be as high as $970,800.
Jumbo Loans, also known as High Balance loans, are when they are over $624,200 for a single-family home, and over $970,800 in high cost areas. These loan amounts are over what is considered the lending limits for conforming loans.
Jumbo loans typically require higher credit scores than conforming loans (680+). You may also need to have a lower debt-to-income ratio (DTI) and put down a larger down payment.
Conforming loans require that you have a debt-to-income ratio below 50% and a credit score of 620 or higher. But if your credit isn’t quite there, you may qualify for a subprime mortgage loan.
These loans are non-conforming and may charge high closing costs and interest rates. However, they can provide a way to get into a home without needing to wait until your credit is in excellent shape. Learn more