Conforming Loan

If your looking to get more information about a Conforming Loan in Denver, you’ve come to the right place. A conforming loan is a mortgage that has a set dollar amount that is limited by the Federal Housing Finance Agency (FHFA) and backed by Freddie Mac and Fannie Mae. The type of borrower that is best suited for this is one with an excellent credit score. Conforming loans are a great option due to their low interest rates. This loan has similar characteristics to a jumbo loan.

Some critical points to note are:

  • Conforming loans cannot surpass a certain limit or dollar amount, this changes from year to year. In 2022 the amount set is $647,200 for most areas in the US. This amount may change depending on where you live.
  • A conforming loan is a mortgage with a set of criteria that is put in place by Fannie Mae and Freddie Mac.
  • This is a preferred loan amongst lenders because it can be packaged and sold in secondary mortgage markets.
  • Conforming loans are favorable due to their lower interest rates compared to other types of mortgages.

Conforming Loan Maximum Amount 2022

The reason why this type of loan is called “conforming” is because of the limit placed on the amount you can receive. As mentioned sbove, that limit is $647,200 for the year 2022. In other more expensive parts of the U.S such as New York or San Francisco that ceiling is much higher. In these areas you can expect to see the limit in upwards of $970,800. There is other criteria that you will have to consider when getting this type of loan. If you plan on making a large down payment your loan-to-value or LTV ratio, debt ratio, and credit history will all be taken into consideration as well as other documentation that will be required.


Nonconforming Loans vs Conforming loans

There may be instances where the only loan choice you have is non-conforming. This option can allow you to buy a house with no down payment. Another payment option that allows for no down payment is the VA loan (highly sought after benefit of the military) or if your in a rural area you can qualify for the USDA loan.

The non-conforming loan generally serves best for people with negative remarks on their credit but still would like to own a home. Different lenders may offer more personalized solutions depending on your situation and if you can or cant qualify. This may be the case if you don’t qualify due to a bankruptcy or some other type of negative report of your credit history.

A non-conforming loan may be the best option if you don’t qualify for other type of financial services. It may be that a government backed loan and a conforming conventional loan aren’t options for you so non-conforming is the way to go.


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Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York.  To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.