Conventional loans can be deemed as either conforming and nonconforming. In a nutshell, conforming loans meet, or “conform” to, guidelines and loan size limits set by the Federal Government, while nonconforming loans do not. Conforming loan limits are set each year by the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, the two main financial corporations that purchase mortgages from lenders. Conforming loan limits have a set baseline amount, however they may be higher depending on the county you live in and whether it has been designated as a “higher-cost” area. An example of a nonconforming loan is a jumbo loan. Jumbo loans (also called jumbo mortgages) are loans written for an amount that exceeds the conforming loan limits.