The three bands
Fannie Mae and Freddie Mac can only buy loans up to a limit set each year by their regulator, the FHFA. For 2026:
| Band | One-unit loan amount, 2026 | Who buys it |
|---|---|---|
| Conforming | Up to $832,750 | Fannie Mae or Freddie Mac |
| High-balance | Above $832,750, up to your county’s limit — at most $1,249,125 | Fannie Mae or Freddie Mac |
| Jumbo | Above your county’s limit | The lender, or an investor it sells to |
The baseline and the high-cost ceiling are FHFA’s; the ceiling is set at 150 percent of the baseline.1 Limits for two- to four-unit properties are higher.
The ceiling applies only in counties FHFA designates as high-cost, and much of coastal California is one. Your county’s exact figure is on FHFA’s conforming loan limit map, and it is worth checking before you decide what price range you are shopping in.
High-balance: still Fannie and Freddie
A high-balance loan is underwritten to essentially the same Fannie Mae and Freddie Mac rules as a conforming one. It often prices a little higher, and a few options narrow. But the down payment programs, the mortgage insurance rules and the underwriting logic mostly carry over. For a lot of buyers here, “conventional” means high-balance and they never notice the difference.
Jumbo: a different set of rules
Above the county limit, neither Fannie Mae nor Freddie Mac can buy the loan, so their rules stop applying. Each lender writes its own. In practice that usually means:
- A larger down payment than a conforming loan would need.
- More reserves — months of payments sitting in the bank after closing, and more of them as the loan gets bigger.
- Stricter credit and debt-to-income lines, applied by an underwriter reading the file rather than an automated approval.
- A closer look at the appraisal, sometimes two of them on very large loans.
Here is the counterintuitive part: jumbo rates are not always higher than conforming rates, and on some days they are lower. The only way to know is to price the actual loan, across enough lenders that their appetites show. That is the case where a broker’s reach matters most, because jumbo guidelines vary far more from lender to lender than conforming ones do.
Sources
These references support the factual explanations above. Where this page states a preference rather than a fact, it says so — those are our editorial judgement, not a claim that any one channel always costs less.
Next
Investment properties and second homesWhat separates the two, the down payment each needs, and why both cost more than a home you live in.Three percent down on a conventional loanNot only FHA. Who qualifies, the income limits, and the pricing waiver most buyers never hear about.Priced against your actual file
Mortgage insurance, loan-level adjustments and the loan limit all turn on your own numbers, and so does whether conventional or FHA comes out cheaper. Send us the basics and we’ll price both — no credit pull, and it commits you to nothing.