A conforming loan meets the guidelines set by Fannie Mae and Freddie Mac, including a loan amount within the conforming limit ($766,550 in most areas for 2025). A non-conforming loan exceeds those limits or does not meet other conforming guidelines. The most common type is a jumbo loan.
Conforming loans are easier to qualify for, have lower rates, and are more widely available. Non-conforming loans are for higher loan amounts or unique borrower situations.
Conforming Loan Limits
Every year, the Federal Housing Finance Agency (FHFA) sets the maximum loan amount that Fannie Mae and Freddie Mac can purchase. This is called the conforming loan limit.
- 2025 baseline limit: $766,550 in most areas across the country.
- High-cost areas: Up to $1,149,825 (150% of the baseline) in designated high-cost counties.
- Texas: Most of Texas, including San Antonio and Bexar County, is at the baseline $766,550 limit.
Loans within this limit are eligible for purchase by Fannie Mae and Freddie Mac, which means lenders can sell them on the secondary market. This keeps mortgage rates lower and credit requirements more accessible.
What Makes a Loan Conforming
For a loan to be considered conforming, it must meet several criteria beyond just the loan amount:
- Loan amount within the conforming limit for the county where the property is located.
- Borrower credit, income, and assets meet Fannie Mae or Freddie Mac underwriting guidelines.
- Property type meets Fannie/Freddie standards (single-family, condo, townhome, etc.) and is in acceptable condition.
- Loan terms comply with qualified mortgage (QM) rules, including limits on fees and points.
When a loan meets all these criteria, it is a conforming loan. This is the most common type of conventional mortgage in the United States.
Non-Conforming Loans (Jumbo)
When a loan exceeds the conforming limit or doesn't meet one of the other conforming guidelines, it falls into the non-conforming category. The most common type is a jumbo loan:
- Loan amounts above the conforming limit, typically starting at $766,551 in most Texas counties.
- Stricter credit requirements -- 700+ credit score is often required, sometimes higher.
- Larger down payments often needed, typically 10-20% down.
- Higher interest rates than conforming loans, though the gap has narrowed in recent years.
- Not eligible for purchase by Fannie Mae or Freddie Mac. Lenders keep them in portfolio or sell to other investors.
Conforming vs Jumbo -- Side by Side
Here is a quick comparison of the key differences between conforming and jumbo loans:
| Feature | Conforming | Jumbo (Non-Conforming) |
|---|---|---|
| Loan Amount | Up to $766K | Above $766K |
| Minimum Credit Score | 620+ | 700+ often |
| Down Payment | 3-5% | 10-20% |
| Interest Rates | Lowest rates | Slightly higher |
| Fannie/Freddie Eligible | Yes | No |
In San Antonio, most homes fall within conforming limits, making conforming loans the standard choice for the majority of buyers. In luxury Hill Country areas like Bulverde, Spring Branch, or Boerne, jumbo loans may be needed for higher-priced properties.
Other Non-Conforming Loan Types
Jumbo loans are the most common non-conforming type, but they are not the only one. Here are other non-conforming loan categories:
- Portfolio loans: Held by the lender on their own books rather than sold to Fannie Mae or Freddie Mac. Lenders can set their own guidelines, which can be more flexible -- or more strict -- depending on the situation.
- Government loans (FHA, VA, USDA): These have their own guidelines separate from Fannie Mae and Freddie Mac, so they are technically non-conforming. But they come with their own favorable terms, like lower down payments and flexible credit requirements.
Just because a loan is non-conforming does not mean it is a bad deal. Government-backed loans are non-conforming but offer some of the best terms available for qualified borrowers.