Hello all,
Can one of the veterans of the RE world please explain the difference between a non-conforming and conforming bank / loan.
From realtor.com
Conforming and nonconforming loans
The term “conforming”, as opposed to “nonconforming”, is sometimes used to explain loans that offer terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are two private, secondary mortgage market companies that buy mortgage loans from lenders, thereby ensuring that mortgage funds are available at all times in all locations around the country. The most important difference between a loan that conforms to Fannie Mae/Freddie Mac guidelines and one that doesn’t is its loan limit. Fannie Mae and Freddie Mac will purchase loans only up to a certain loan limit (currently $252,700). So, if your loan amount will be for more than the conforming loan limit of $252,700, you may be asked to pay a higher interest rate on your mortgage. Your mortgage loan may also follow slightly different underwriting requirements, particularly in regard to your required down payment amount. Check with your lender about this if you are taking out a large loan amount. Nonconforming loans are sometimes called jumbo loans.
diqueze,
The conforming loan amount is actually 417,000 and below.
Thank you both for excellent informative answers.