A non-conforming loan exceeds what amount?

A non-conforming loan is one that does not meet the underwriting standards set by government-sponsored enterprises such as Fannie Mae and Freddie Mac. These loans typically have a loan limit higher than that which conforms to those standards.

As of the baseline conforming loan limit for 2023, which is set at $548,250 for most areas in the continental United States, any loan amount that exceeds this limit would be considered a non-conforming loan. This threshold can vary slightly by geographic area, with high-cost areas allowing for higher limits. Therefore, the correct answer is tied to the established conforming loan limits, marking anything above $548,250 as non-conforming.

Understanding the distinction between conforming and non-conforming loans is essential for anyone working in real estate finance, as it influences the types of loans available to borrowers and the regulations surrounding those loans.