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What is a conforming loan?
A conforming loan is a mortgage that falls within the loan limit set each year by the Federal Housing Finance Agency (FHFA) and meets the guidelines to be backed by Fannie Mae or Freddie Mac. Because these loans are easier for lenders to sell, they typically come with competitive rates and more standardized qualifying.
What is a jumbo loan?
A jumbo loan is any mortgage larger than the conforming limit for your county. Because it can't be backed by Fannie or Freddie, the lender takes on more risk — which usually means stricter requirements around credit, down payment, reserves, and documentation.
The key idea: "Jumbo" isn't about the home's price — it's about your loan amount compared to your county's conforming limit. A bigger down payment can sometimes keep a pricey home in conforming territory.
The county line — why California is different
Here's what trips people up: the conforming limit isn't one national number. It's a baseline that goes higher in high-cost areas — and many California counties qualify as high-cost. That means the line between conforming and jumbo sits much higher here than in most of the country.
Because the limit is updated annually and varies by county, quoting a single dollar figure would quickly go out of date. Instead, check the current limit for your county:
Check first: Use our Mortgage Strategy tool to run your property against your county's conforming line before you assume you need a jumbo loan.
Jumbo vs conforming: side by side
| Factor | Conforming | Jumbo |
|---|---|---|
| Loan size | At or below county limit | Above county limit |
| Backed by Fannie/Freddie | Yes | No |
| Typical down payment | As low as 3% | Often 10–20%+ |
| Credit requirements | Standard | Usually stricter |
| Cash reserves | Lower | Higher |
| Interest rates | Competitive | Similar — sometimes higher or lower |
| Documentation | Standardized | More detailed |
How to know which one you need
Work it out in three steps:
- Estimate your loan amount — purchase price minus your down payment.
- Check your county's conforming limit with the Mortgage Strategy tool.
- Compare. If your loan amount is at or below the limit, you're likely conforming (or high-balance). Above it, you're in jumbo territory.
Often there's a smart middle path — adjusting your down payment, or using a high-balance conforming loan — that gets you better terms. That's exactly the kind of structuring we do with buyers every day.
New to all this? Start with our first-time buyer guide, or just ask Orange — we'll tell you straight which path fits your purchase.
