Category
What is meant by a conforming or conventional loan?
Answer
Two major government-affiliated agencies, the Federal National Mortgage Association (nicknamed Fannie Mae) and the Federal Home Loan Corporation (nicknamed Freddie Mac), are responsible for providing financial backing for the majority of loans in the USA. They follow their own sets of standards and guidelines before approving those loans, and because they play such a dominant role in the mortgage industry, loans that meet their standards are called “conventional” or “conforming” loans.
