Conforming vs. Jumbo Loan

Understanding Different Types of Loans

The terms ‘conforming’, ‘high-balance’, ‘super-conforming, ‘jumbo’, ‘non-conforming’, ‘super-jumbo’ can make your head spin – just what does all of this mean?  Each of these terms has to do with the size of the loan, which in turn, influences the interest rate and underwriting guidelines.  To help make sense of these commonly used terms, here are general guidelines on how all of these loans break down:

• $50K – $417K: (Conforming Loan) – This tier typically has the best rates available and easiest underwriting
• $417,001 – $625K: (High-Balance or Super-Conforming) – This tier has slightly higher rates than conforming and favorable underwriting
• $625,001 – $1M: (Jumbo or Non-Conforming) – This tier is typically associated with higher rates than either conforming loan tiers and underwriting is more stringent
• $1M+: (Super-Jumbo): As you can imagine, this tier has the highest rates and therefore qualifying is more rigid

In addition, each county has a different cutoff, where a conforming loan becomes a jumbo loan. To find out what the conforming limit is in your county, please click on the following link:

http://www.fhfa.gov/DataTools/Downloads/Documents/Conforming-Loan-Limits/FullCountyLoanLimitList2016_HERA-BASED_FINAL.pdf

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