What is a Conforming Loan?
A loan that conforms to the guidelines established by Fannie Mae or Freddie Mac.
These guidelines establish the maximum loan amount, down payment, borrower
credit & income requirements, and suitable properties. Lenders that make loans
established to these guidelines may sell those loans to Fannie Mae or Freddie
Mac. These lenders may retain the servicing on these loans - so that a borrower
will continue to make payments to the original lender. Conforming loans make up
the majority of loans in the U.S.
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