Non-Conforming

“Non-Conforming” is a secondary mortgage market term referring to a residential mortgage loan that exceeds the loan size specifications of Fannie Mae and Freddie Mac for purchasing loans in the secondary mortgage market. Because Fannie Mae and Freddie Mac are limited by federal law to purchasing loans not exceeding a certain dollar amount ($417,000 in 2009), private sector mortgage conduits have stepped in to purchase loans valued over $417,000.

The term “non-conforming” can also refer to loans with loan amounts under $417,000 granted to customers with less than perfect credit that are not secured by Fannie Mae or Freddie Mac.