Updated Loan Limits for Fannie Mae and Freddie Mac

The Federal Housing Finance Agency (FHFA) announced on November 25, 2025 that the 2026 conforming loan limits for Fannie Mae and Freddie Mac have increased to $832,750 for a single-family home in most parts of the United States — up $26,250 from the 2025 limit of $806,500. The 3.26% increase directly mirrors the average national home price appreciation between the third quarters of 2024 and 2025, as required by the Housing and Economic Recovery Act (HERA). In high-cost markets, the ceiling has risen to $1,249,125. The RefiGuide can help you compare today’s conventional mortgage rates from competitive Fannie Mae and Freddie Mac lenders at no cost.

These limits matter enormously to borrowers. Any mortgage at or below the conforming limit qualifies as a conventional conforming loan — eligible for purchase by Fannie Mae and Freddie Mac, which keeps rates competitive and qualification standards accessible. Any mortgage that exceeds the limit becomes a jumbo loan, which carries stricter credit, equity, and documentation requirements and typically a rate premium over conforming loans.

2026 Conforming Loan Limits: Official FHFA Numbers

The following limits are effective for all loans delivered to Fannie Mae and Freddie Mac on or after January 1, 2026, including loans originated in late 2025. Source: FHFA, November 25, 2025.

Standard Areas (Most U.S. Counties)

High-Cost Areas (Ceiling Limits)

Alaska, Hawaii, Guam, and U.S. Virgin Islands

Special statutory provisions apply to these territories. In 2026, the baseline limit is $1,249,125 for a single-family home and the ceiling limit is $1,873,675. Note that two Hawaii counties — Maui and Kalawao — moved to high-cost area status for 2026.

High-cost limits apply county by county where 115% of the local median home price exceeds the baseline. The FHFA’s full county-by-county lookup table is available at fhfa.gov/CLL. Due to rising home values, the 2026 limits are higher in all but 32 U.S. counties compared to 2025.

Why Conforming Loan Limits Increased in 2026

The conforming loan limit is required by HERA to adjust annually in proportion to changes in the average U.S. home price. The FHFA’s House Price Index (HPI) — the seasonally adjusted, expanded-data measure — showed national average home prices rose 3.26% between Q3 2024 and Q3 2025. The baseline limit therefore increases by the same 3.26%, from $806,500 to $832,750.

For context, this year’s increase is notably smaller than the 5.5% jump in 2025 and well below the pandemic-era surges of 2022 and 2023. The moderating pace of home price growth reflects a housing market that remains expensive but is no longer appreciating at double-digit rates. The 3.26% figure signals a normalization that many economists expect to continue through 2026.

From a policy perspective, the 2026 limit announcement coincided with renewed debate about whether government-sponsored enterprise (GSE) conforming limits should extend to homes priced above $800,000. FHFA Director Bill Pulte publicly dismissed proposals to reduce limits in early 2026, reaffirming the formula-based adjustment methodology.

Conforming vs. Jumbo: What the Limit Means for Borrowers

When your loan amount exceeds $832,750 in a standard-cost county — or the applicable high-cost ceiling in your specific county — the loan becomes a jumbo mortgage. Jumbo loans cannot be purchased by Fannie Mae or Freddie Mac and therefore carry meaningfully different terms:

• Credit score: Most jumbo lenders require 700–720 minimum; many set the threshold at 740 for best pricing, compared to 620 for conforming loans
• Down payment: Typically 10–20% for jumbo; as low as 3% for conforming
• Cash reserves: Jumbo lenders commonly require 6–12 months of PITI reserves; conforming requirements are generally 2–6 months
• DTI ratio: Jumbo lenders typically cap DTI at 43%; conforming loans allow up to 45–50% through automated underwriting
• Rate premium: Jumbo rates in 2026 average approximately 0.25–0.50 percentage points above conforming rates in most market conditions

The 2026 limit increase means that buyers who were previously forced into jumbo financing for loans between $806,500 and $832,750 can now access conforming rates — potentially saving thousands over the life of the loan. In markets like suburban Boston, the D.C. metro area, parts of Colorado, and many Florida coastal markets, this incremental shift brings a meaningful share of median-priced homes back within conforming reach.

2026 Fannie Mae and Freddie Mac Qualification Requirements

Both Fannie Mae and Freddie Mac set the eligibility standards that lenders must follow for conforming loans — covering credit, income, down payment, and debt. Understanding these requirements helps borrowers know what to expect before they apply.

Credit Score

In a significant policy change effective November 16, 2025, Fannie Mae removed the hard minimum credit score requirement of 620 from its Desktop Underwriter (DU) automated underwriting system. Freddie Mac made a similar update through its Loan Product Advisor (LPA). Under the updated guidelines, borrowers with scores below 620 can technically be approved for Fannie Mae- and Freddie Mac-backed loans if strong compensating factors — such as a large down payment, significant cash reserves, low DTI ratio, and stable employment — support the overall credit risk assessment.

In practice, the vast majority of approved conforming loans will still carry credit scores of 620 or higher, as sub-620 profiles require offsetting strength across multiple risk factors. Most lenders also maintain their own overlays — stricter internal standards above the GSE baseline — and will continue to enforce a 620 floor absent the compensating factors DU can evaluate holistically. Borrowers with 740+ scores typically access the best pricing tiers with the lowest loan-level price adjustments (LLPAs).

Down Payment and LTV

• Minimum down payment: 3% for primary residences on fixed-rate loans (Fannie Mae HomeReady and standard programs); 5% for most adjustable-rate and second-home transactions
• Investment properties: 15–25% minimum depending on unit count and loan program
• PMI requirement: Private mortgage insurance is required when the down payment is below 20% (LTV above 80%). Learn more about how to get a mortgage without PMI if you want to avoid this cost
• Maximum LTV for purchases: 97% for primary residence fixed-rate (3% down); 95% for primary residence ARMs; 85% for one-unit investment properties

Debt-to-Income Ratio (DTI)

Fannie Mae allows a maximum back-end DTI of 50% through Desktop Underwriter for borrowers with strong compensating factors. The standard guideline is 45% — and borrowers with scores below 620 or LTVs above 75% generally need DTI at or below 36%–45% depending on the overall risk profile. Freddie Mac follows similar parameters through LPA. There is no separate front-end DTI requirement for conforming conventional loans — only the back-end (total monthly debt including housing) is evaluated.

Income and Employment

Standard documentation requires two years of employment history and income verification via W-2s, pay stubs, and tax returns. Self-employed borrowers must document two years of business tax returns plus a year-to-date profit and loss statement. A significant 2025–2026 trend: Fannie Mae has expanded its acceptance of bank statement income documentation and has updated DU to better evaluate borrowers with non-traditional employment, including gig economy workers and those with variable income.

Fannie Mae HomeReady and Freddie Mac Home Possible

Both enterprises maintain income-capped first-time buyer programs with reduced PMI and 3% down payment requirements:

• Fannie Mae HomeReady: Income must be at or below 80% of the area median income (AMI) for the property’s location. Allows non-borrower household income to be considered in qualification, and accepts boarder income. Offers reduced mortgage insurance rates.
• Freddie Mac Home Possible: Also capped at 80% AMI. Allows income from non-occupant co-borrowers. Sweat equity can be applied as the borrower contribution in certain transactions. Both programs use standard conforming loan limits including the new 2026 baseline of $832,750.

Property Types and Loan Limits by Unit Count

Conforming loan limits are not limited to single-family homes. Fannie Mae and Freddie Mac both purchase mortgages on two-, three-, and four-unit properties at the higher limits shown in the table above. This is an important distinction for real estate investors who plan to live in one unit of a multi-family property (owner-occupied investment) — the larger conforming limits for 2- to 4-unit properties allow meaningful financing before hitting the jumbo threshold.

Applying for a Fannie Mae or Freddie Mac Conforming Loan in 2026

Neither Fannie Mae nor Freddie Mac originates or issues loans directly to consumers. They buy and guarantee mortgages originated by banks, credit unions, mortgage companies, and brokers who have been approved as sellers/servicers. When you apply for a conventional conforming mortgage, you apply through a participating lender who underwrites the loan to GSE standards and then sells it to Fannie or Freddie after closing.

The application process uses the Uniform Residential Loan Application (URLA), which requests employment history, income, assets, monthly debts, and property information. Both Fannie Mae’s Desktop Underwriter (DU) and Freddie Mac’s Loan Product Advisor (LPA) are automated underwriting systems that evaluate the overall risk profile of the loan application — taking into account credit, income, LTV, reserves, and property type simultaneously rather than evaluating each factor in isolation.

For most conforming loans, you should prepare the following documentation in 2026:

• Two most recent W-2s and pay stubs covering at least 30 days of income
• Two years of federal tax returns (all schedules) — particularly important for self-employed borrowers or those with rental income
• Two to three months of bank and asset account statements
• Employer contact information for employment verification (many lenders use automated verification services)
• Photo ID and Social Security number
• Signed purchase agreement (for purchases) or current mortgage statement (for refinances)

How the 2026 Limits Compare to FHA Limits

While this article focuses on Fannie Mae and Freddie Mac conforming limits, it is useful to understand how they compare to FHA limits. The 2026 FHA loan limits set a floor of $524,225 and a ceiling of $1,209,750 for single-family properties in most areas — lower than the Fannie/Freddie conforming limits. This means some buyers who need to borrow between the FHA ceiling and the $832,750 conforming limit will find that a conventional Fannie/Freddie loan is the appropriate product rather than FHA, particularly if their credit and income qualifications support it.

The practical implication: in markets where home prices cluster between $600,000 and $832,750, FHA financing may not be available at all (if the loan amount exceeds FHA limits), making conforming conventional the only government-linked option short of a jumbo loan.

What the 2026 Limits Mean for Home Buyers and Refinancers

For buyers in the $806,500–$832,750 range who were previously facing jumbo loan requirements, the 2026 limit increase opens conforming financing with its lower rates, 3% down payment options, and broader lender availability. This is most impactful in mid-tier suburban markets in states like Colorado, Texas, Virginia, Washington, and the Carolinas, where median prices have been pushing into this range.

For refinancers, the higher limit means more existing loans originated above the 2025 cap can now be refinanced into a conforming product — potentially accessing the broader pool of conforming lenders and the rate competition that comes with it. With 30-year conforming refinance rates averaging 6.22% per Freddie Mac’s March 19, 2026 PMMS — down from 6.67% a year ago — borrowers who purchased with jumbo financing in 2023 or 2024 should evaluate whether their loan balance now falls within conforming territory.

Last reviewed: March 14, 2026 by Bryan Dornan, Mortgage Lending Expert and Founder of RefiGuide.org.

References: Conforming loan limit data sourced from FHFA announcement, November 25, 2025 (fhfa.gov). Freddie Mac PMMS rate data from the week of March 19, 2026.

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