What is a High Balance Loan? 

The Federal Housing Finance Agency (FHFA) sets a baseline loan limit across the country. Loan amounts that fall within this limit are considered “Conforming” and are eligible to be for purchase by Fannie Mae and Freddie Mac.

You can read more about Conforming loans here.

FHFA also designates some counties in the US as “high cost of living” counties and provides a larger loan limit to accommodate homeowners in those counties. This limit is called the High Balance limit.

Loans that fall within the High Balance limit in these counties are also eligible to be purchased by Fannie Mae and Freddie Mac. While qualifying guidelines are typically similar to conforming loans, rates/fees are typically higher. The current high balance limit is $822,375 whereas the current conforming loan limit is $548,250.

Any loan larger than the limits set by FHFA are called Jumbo loans and are not purchased by Fannie Mae or Freddie Mac. These loans are typically “portfolio” loans for large banks and hence have stricter qualifying guidelines and worse rates.

You can learn more about Jumbo loans here.

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