Fannie Mae and Freddie Mac are restricted by law to purchasing single-family mortgages with unpaid balances below a specific amount, known as the “conforming loan limit.” Loans above this limit are known as jumbo loans.

The conforming loan limit for mortgages that finance single-family one-unit properties has increased from $33,000 in the early 1970s to $417,000 in 2006. Higher limits apply to loans for properties that finance two- to four-family units. The limits are adjusted each year to reflect the change in the national average single-family home price, using the Federal Housing Finance Board’s Monthly Interest Rate Survey.

The limits are 50 percent higher for four statutorily-designated high cost areas: Alaska,  Hawaii, Guam, and the U.S. Virgin Islands.