The U.S. government follows the process below to determine the conforming loan limit.

• The Federal Housing Finance Agency (FHFA) collects information on recent mortgage transactions from Fannie Mae and Freddie Mac
• The agency uses this information to determine average home values for that year
• The average home value is then used to set the conforming loan limit
• As of 2020, the limit for a conforming loan in most of the U.S. is $510,400. If your mortgage is below $510,400, you have a conforming loan. If your mortgage is above $510,400, you have a non-conforming, or jumbo, loan.
• In very expensive areas of the U.S, the conforming loan limit could be adjusted higher to reflect higher home values. The maximum conforming loan limit may be as much as 50% higher, currently $765,600.

Contact a mortgage loan officer to learn more about more about your loan options.

Underwriting requirements for jumbo loans are stricter than those for conforming loans.

• Credit score - Typically, a higher credit score is required
• Income levels - You’ll likely be required to have a higher income
• Debt-to-income ratio - Your total debt should be a lower percent of your income
• Cash reserves - You should have assets readily available to cover 6-to-12 months of mortgage payments. Visit our mortgage refinance calculator to estimate your monthly payment.
• Appropriate property appraisal - As with all mortgages, the appraisal on your property must support your requested loan amount. You may be required to have a second appraisal.

The three main advantages of a jumbo loan compared to conforming loans are:

• Competitive rates - The mortgage industry generally considers jumbo loans high risk. However, jumbo borrowers are typically low risk. The balance between the two makes jumbo loan rates comparable to conforming loan rates. At times jumbo rates may even be lower.
• A variety of loan options - Jumbo mortgages may have an adjustable rate or a fixed rate. A 30-year jumbo mortgage has a loan term of 30 years. Other jumbo loan options are also available.

Consider a jumbo loan if you need a mortgage loan amount above the conforming loan limits. The limit is currently set at $510,400 in most areas of the United States. Contact a U.S. Bank mortgage loan officer to determine which mortgage option is the best loan for your needs.