Conventional loans are one of the most popular mortgage options for buyers in the United States regarding home financing.
Not backed by the government, these loans are offered through private lenders and come with specific loan limits that can vary by state.
Understanding these regional differences is key to navigating the mortgage process successfully.
Whether you’re buying a home in Arizona, California, Texas, or any other state, loan limits, down payment expectations, and lender criteria can shift based on local real estate markets and economic conditions.
This guide explores the conventional loan requirements in key U.S. states to help you make informed decisions.
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What is a conventional loan?
A conventional loan, also known as a “conforming loan,” is a type of mortgage not guaranteed or insured by federal government agencies like the VA or FHA.
Instead, these loans are backed by private lenders and must adhere to the standards, such as the conforming loan limits set by Fannie Mae and Freddie Mac.
This means they typically require a higher credit score and a down payment, but they also allow for more flexibility regarding loan terms and property types.
If you’re looking to buy a home and have a solid credit background, a 15-year fixed rate or 30-year fixed-rate mortgage might give you the stability and options that fit your financial situation.
If you are purchasing a home in a high-cost area that exceeds the conforming loan limits, you may need a jumbo loan.
General conventional loan requirements
While each state has its own specific conventional loan requirements, these broad guidelines will apply across all of the states:
- Requires a minimum credit score of 620
- Down payment options start as low as 3% but are typically 5%
- Lenders will assess your debt-to-income ratio (DTI) to make sure you can afford the monthly payments (50% or less is preferred)
- Conventional loans with less than 20% down payment require private mortgage insurance (PMI)
- Some lenders may require cash reserves to cover a few months of mortgage payments (principal, interest, taxes, and insurance)
- Employment verification such as pay stubs and W-2 forms
- A property appraisal must be performed to confirm the home’s value meets or exceeds the purchase price
- For first-time homebuyers, some lenders may require completion of a homebuyer education course, especially if you’re putting down less than 20%
State-specific conventional loan limits
Conventional loan requirements can vary quite a bit from one state to another.
Local economic conditions, real estate markets, and state regulations all shape lending practices.
For instance, loan limits that Fannie Mae and Freddie Mac set are adjusted based on local housing market values.
Lenders may also have different underwriting criteria based on regional economic trends and state-specific legal requirements that influence down payment expectations, interest rates, and other loan terms.
Let’s look at the conforming loan limits in hot market states nationwide.
Arizona (AZ)
Arizona’s 2024 conventional loan limit for most counties, including Maricopa and Pima counties, is $766,550 for a single-family home.
Higher limits apply for multi-unit properties:
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
California (CA)
Due to high property values, California has some of the highest conventional loan limits. Counties like Los Angeles and San Francisco have a limit of $1,149,825 for a single-family home.
Lower-cost counties like Alpine have a baseline limit of $766,550.
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
Colorado (CO)
In Colorado, loan limits vary by county. For example, in Denver, the loan limit for a single-family home is $816,500.
High-cost areas, like Boulder County, have a higher limit of $856,750.
- Two-unit: $1,045,250
- Three-unit: $1,263,500
- Four-unit: $1,570,200
Florida (FL)
In Florida, the loan limit for a single-family home in most counties is $766,550.
Some high-cost coastal areas, such as Monroe County, have higher limits, with a maximum of $929,200.
- Two-unit: $1,189,550
- Three-unit: $1,437,900
- Four-unit: $1,786,950
Georgia (GA)
Georgia’s loan limits also follow the baseline of $766,550 for a single-family home in most counties. However, counties like Chatham and Bryan can differ slightly depending on the local housing market.
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
Missouri (MO)
In Missouri, the loan limit for a single-family home in most counties is $766,550.
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
North Carolina (NC)
In North Carolina, the loan limit for a single-family home is $766,550 across most counties. However, some counties, such as Wake County and Mecklenburg County, potentially have higher limits based on local housing markets.
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
Tennessee (TN)
In Tennessee, the conforming loan limit for a single-family home is generally $766,550 across most counties. However, counties like Davidson County (Nashville) have higher limits, with a maximum of $943,000.
- Two-unit: $1,207,200
- Three-unit: $1,459,250
- Four-unit: $1,813,500
Texas (TX)
In Texas, the loan limit for a single-family home is generally $766,550 across most counties. The limits remain at the baseline in high-cost areas like Travis County and Dallas County.
- Two-unit: $981,500
- Three-unit: $1,186,350
- Four-unit: $1,474,400
Washington (WA)
In Washington, the loan limit for a single-family home is $766,550 in most counties, but high-cost areas like King County and Snohomish County have higher limits, with a maximum of $977,500 for a single-family home.
- Two-unit: $1,251,400
- Three-unit: $1,512,650
- Four-unit: $1,879,850
Take the next step on your conventional loan
Ready to take the next step toward homeownership? Whether buying your first home or refinancing, a conventional loan could be the perfect fit for you.
Let MyPerfectMortgage.com match you with the perfect lender.Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
