Wondering where the line is between a conforming loan and a jumbo loan in Phoenix? You are not alone. The limit affects your buying power, down payment strategy, and even which loan programs you can use. In this guide, you will learn what conforming loan limits mean for Maricopa County buyers, how to check the current number, and how to plan your budget with simple examples. Let’s dive in.
Conforming loan limits explained
A conforming loan is a mortgage that meets the size and standards Fannie Mae and Freddie Mac will purchase from lenders. Each year, the Federal Housing Finance Agency sets the maximum conforming loan size for one-unit homes. Loans at or below the limit are conforming. Loans above the limit are considered jumbo.
These limits matter because product options, pricing, and underwriting often change once you move into jumbo territory. Many low down payment conventional programs are built for conforming loans. Jumbo loans typically have different approval standards, which can affect your timeline and budget.
Why limits matter in Phoenix
Across the Phoenix metro, you will find a wide range of home prices, from entry-level subdivisions to higher-priced pockets. If your down payment is modest, the required loan amount can quickly bump into the conforming limit. Knowing the limit helps you set a realistic search price and avoid surprises when you get pre-approved.
For move-up buyers, the limit is just as important. If your target price requires a loan over the conforming cap, you will likely face jumbo underwriting, which may require stronger credit, larger reserves, and potentially a different rate.
2024 baseline and how to check Maricopa
FHFA updates conforming loan limits every year. As a reference point, the national baseline conforming limit for a one-unit home in 2024 is 766,550. County limits can be equal to the baseline or higher in designated high-cost areas, so you should always confirm the current Maricopa County figure using the FHFA county lookup tool. Be sure to note the year when you check, since limits change annually.
How loan limits shape your budget
Your maximum conforming loan amount cannot exceed the county limit. That number, combined with your down payment, determines the highest purchase price you can target while staying conforming.
Here is the simple formula many buyers use:
- Purchase price = Loan amount ÷ (1 − down payment percentage)
If you want to stay within conforming territory, set the loan amount in your calculation to the county’s conforming limit for the current year.
Sample purchase price math
To keep the math straightforward, the examples below use the 2024 national baseline of 766,550 as a stand-in for the loan amount. These are examples only. Always confirm Maricopa County’s current limit before applying the math to your search.
- With 20 percent down: 766,550 ÷ 0.80 = 958,187.50. With 20 percent down, you could shop up to about 958,000 while keeping the loan amount at or under 766,550.
- With 3 percent down: 766,550 ÷ 0.97 ≈ 790,670. With 3 percent down, your price cap to stay conforming is closer to 790,000 in this example.
These examples show how a lower down payment reduces your maximum conforming purchase price. If your target price requires a bigger loan than the limit allows, you would look at jumbo options or adjust your down payment strategy.
Conforming vs. jumbo: what changes
When your required first-lien loan amount stays at or below the conforming limit, you are in conventional conforming territory. If it exceeds the limit, you are in jumbo territory. Here is what often changes:
- Underwriting: Jumbo loans can require higher credit scores and more months of reserves.
- Down payment: Jumbo programs often require larger down payments compared to some conforming products.
- Pricing: Jumbo rates can be different than conforming rates. The exact difference depends on credit, loan-to-value, debt-to-income, and market conditions.
- Mortgage insurance: Conforming loans with loan-to-value above 80 percent usually require private mortgage insurance, which can be canceled under standard rules. Jumbo loans may handle mortgage insurance differently or use lender solutions that change costs.
Low down payment options tied to conforming
Some conventional programs allow as little as 3 percent down for eligible buyers. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible are examples. These programs are designed for conforming loan amounts and have rules about income limits, occupancy, and borrower education. If your loan amount exceeds the conforming cap, these options typically do not apply.
If you are comparing FHA or VA, remember they follow separate program rules and frameworks. They are not governed by the Fannie Mae and Freddie Mac conforming loan limits. Ask your lender to show you a side-by-side estimate so you can compare total costs and qualifications.
Phoenix buyer scenarios
- First-time buyer with 3 percent down: If your preferred neighborhood pushes your price above what a conforming limit supports with 3 percent down, consider expanding your search radius, increasing your down payment, or comparing an FHA option.
- Move-up buyer with significant equity: You may be able to avoid jumbo by increasing your down payment or using sale proceeds to reduce the first-lien amount to the conforming cap.
- Relocator targeting a higher-priced pocket: Ask your lender for both conforming and jumbo scenarios early in pre-approval so you can plan for potential reserve or documentation requirements.
Steps to take right now
- Confirm the current year’s conforming loan limit for Maricopa County and save a screenshot for your records.
- Get fully pre-approved, not just pre-qualified, so you know whether your target price keeps you within conforming limits.
- Ask your lender for two quotes if you might cross the line: one that stays conforming and one jumbo, with itemized costs.
- If you are near the limit, explore strategies: increase down payment, consider a smaller first lien with a second lien, or embrace a jumbo if it fits your goals.
- For low down payment programs, verify eligibility. Check income caps, occupancy rules, and any required homebuyer education.
- Budget for cash to close beyond the down payment. Closing costs, prepaid items, and any required reserves can change the amount you need.
Planning tips for Maricopa buyers
- Date your research. Note the year when you check the FHFA limit. Limits update annually.
- Pair your home search with your financing plan. Your price filters should reflect your down payment and the conforming limit you want to stay under.
- Compare total cost, not just rate. Factor in mortgage insurance, points, and expected time in the home when comparing conforming and jumbo options.
- Keep your options open. FHA and VA may fit specific needs, but their rules differ from conventional conforming loans.
Work with a guide who knows the East Valley
You deserve a clear plan that fits both your budget and your wish list. If you are shopping in Chandler, Gilbert, Mesa, Tempe, or greater Phoenix, a local, relationship-first approach can help you match neighborhoods with smart financing. Let’s build your plan, from pre-approval to keys in hand, with simple, friendly guidance and modern tools. Reach out to Rebecca Smith Real Estate to get started.
FAQs
What is the current conforming loan limit for Maricopa County?
- FHFA updates limits annually and publishes county figures, so check the FHFA county lookup for the current Maricopa number and note the year you verify it.
How do conforming loan limits affect first-time buyers in Phoenix?
- The limit sets a cap on your loan size for conventional programs, which can influence your maximum purchase price when using low down payment options.
If my loan is just over the limit, do I have to go jumbo?
- Generally yes, unless you restructure with a larger down payment or a conforming first lien paired with a second lien, which your lender can evaluate.
Will a jumbo loan change my interest rate a lot?
- It can, but the difference depends on your credit, loan-to-value, debt-to-income, and market conditions, so request side-by-side quotes.
Can I avoid PMI on a conforming loan in Maricopa County?
- Yes, with 20 percent or more down, or through options like lender-paid mortgage insurance or a piggyback second, each with different cost tradeoffs.
Are FHA and VA loans limited by the conforming cap?
- No, FHA and VA follow separate program frameworks and eligibility rules, so discuss them with your lender if you need alternatives to conventional conforming.
