A conforming loan is a conventional mortgage that meets the purchase guidelines of Fannie Mae and Freddie Mac and stays within the loan limits set each year by the Federal Housing Finance Agency (FHFA).
Why it matters
Because conforming loans can be sold to Fannie Mae or Freddie Mac, lenders can usually price them more favorably than loans that fall outside the guidelines. Guidelines cover the loan amount, your debt-to-income ratio, credit profile, down payment and reserves.
Loan limits in Los Angeles County
Los Angeles County is a designated high-cost area, so its conforming limit is higher than the national baseline. FHFA publishes the limits every November for the following year; ask us for the current figure for your property type. Loans above the limit are jumbo loans.
Typical features
- Down payments from 3% for qualifying first-time buyers, 5% for most others.
- Fixed and adjustable-rate options, 10- to 30-year terms.
- Private mortgage insurance below 20% down, cancellable once you reach 20% equity.