Jumbo Loans

Conforming Loans: A Modern Overview 

What Are Conforming Loans?

Conforming loans are mortgages that meet the eligibility criteria set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. These loans adhere to specific guidelines regarding loan size, credit score, and other factors. One of the key conditions is the “conforming loan limit,” which represents the maximum loan amount eligible for purchase by these GSEs. This limit is updated annually by the Federal Housing Finance Agency (FHFA) to reflect fluctuations in the real estate market.

Florida Conforming Loan Limits for 2025

In 2025, the conforming loan limit in Florida for single-family homes is set at $726,200. For high-cost areas within the state, such as parts of Miami or Palm Beach, the limit can be higher—up to $1,073,000 (150% of the baseline limit). The FHFA raised these limits significantly in recent years, responding to the continued growth in home prices.

Georgia Conforming Loan Limits for 2025

For Georgia, the conforming loan limit for single-family homes in 2025 is $726,200. This limit applies to most areas in the state. However, for higher-cost regions such as parts of Atlanta, the limit can be higher—up to $1,073,000, in line with the 150% cap in high-cost areas. These limits reflect the growth in home prices and the dynamic real estate market in Georgia.

Jumbo Loans: Non-Conforming Financing

When a buyer requires a mortgage that exceeds the conforming loan limit, they will need to explore non-conforming loans—commonly referred to as jumbo loans. Jumbo loans are designed for high-value properties and are not eligible for purchase by Fannie Mae or Freddie Mac, which means they carry higher risks for lenders.

As a result, jumbo loans typically have more stringent qualification criteria than traditional conforming loans. These loans are essential for financing luxury properties, a significant portion of Florida’s and Georgia’s real estate markets. Jumbo loans can be used for primary residences, second homes, or investment properties, with both fixed-rate and adjustable-rate options available. They are often structured with 30-year terms.

Jumbo Loan Requirements

Here’s an updated list of typical jumbo loan requirements for 2025:

  1. Credit Score: Borrowers usually need a minimum credit score of 680, though those with scores above 700 may qualify for the best rates and terms.
  2. Debt-to-Income (DTI) Ratio: Ideally, borrowers should have a DTI ratio of 36% or less, though some lenders may accept up to 43%.
  3. Income Verification: Lenders will require 30 days of pay stubs and two years of tax returns. Self-employed borrowers typically need to provide 60 days of bank statements and two years of tax returns.
  4. Down Payment: While a 20% down payment is the standard for jumbo loans, some lenders may accept a down payment as low as 10% depending on the borrower’s financial profile and other factors.
  5. Cash Reserves: Borrowers will generally need to show that they have 6 months of mortgage payments in reserves to cover emergencies.
  6. Property Type: Jumbo loans are available for various property types, including single-family homes, multi-family homes, vacation properties, and investment properties.

Key Differences Between Conforming and Jumbo Loans

  • Conforming Loans: Meet the FHFA’s limit and can be sold to Fannie Mae or Freddie Mac, making them lower-risk for lenders and usually offering more favorable terms (lower interest rates).
  • Jumbo Loans: Exceed the FHFA’s limit, are not eligible for sale to GSEs, and carry higher interest rates and stricter requirements due to the increased risk for lenders.

For those purchasing high-end properties in Florida and Georgia, jumbo loans remain a crucial financing tool, providing opportunities for homebuyers to secure the properties of their dreams even in the face of rising real estate prices.

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