Are you wondering what price point keeps your mortgage in the “conforming” range in Phoenix? You are not alone. Understanding conforming loan limits helps you plan your budget, compare interest rates, and decide how much to put down. This guide breaks down what conforming means, how the limits are set for Maricopa County, and how the choice between conforming and jumbo can affect your monthly payment, PMI, and approval path. Let’s dive in.
Conforming loans, in plain English
A conforming loan meets size and documentation standards that allow Fannie Mae or Freddie Mac to purchase it from your lender. The size cap is called the conforming loan limit. If your required loan amount is at or below the county limit for your property type and unit count, you are in conforming territory.
If your loan amount is above the county limit, it is non-conforming, often called a jumbo loan. Jumbo loans follow lender-specific rules and are not sold to Fannie Mae or Freddie Mac.
Who sets the limits and when
The Federal Housing Finance Agency sets a national baseline conforming loan limit each year. The FHFA also publishes county-level limits for areas that qualify as high-cost markets. Limits typically change year to year based on shifts in the average U.S. home price.
Limits are published by unit count. Most Phoenix buyers look at the 1-unit limit for single-family homes and condos. Duplexes, triplexes, and fourplexes have higher published limits.
How to check Phoenix’s current limit
To confirm the current year’s number for Maricopa County, review the FHFA county-level table and locate the 1-unit limit. If you are exploring multi-unit properties, check the 2-, 3-, or 4-unit columns. If you are comparing other programs, remember FHA and VA have their own rules and limits that differ from conforming standards.
A quick decision rule: calculate the loan you need and compare it to the county limit. If your needed loan is at or below the limit, it is conforming. If it is higher, you will need a jumbo loan or another strategy.
Conforming vs. jumbo: why it matters
Conforming loans often come with more competitive rates and standardized approvals because they can be sold to Fannie Mae or Freddie Mac. Jumbo loans are priced and underwritten by individual lenders, which can mean higher rates, stricter credit standards, and larger cash reserve requirements.
Interest rates and your payment
Because conforming loans benefit from a deep secondary market, lenders usually offer more favorable pricing. Jumbo pricing varies by lender and can be higher due to lower liquidity and higher perceived risk. Even a small rate difference changes your monthly principal and interest.
Example using hypothetical numbers for illustration only:
- Loan amount: 500,000, 30-year term
- Conforming rate at 6.5 percent: monthly principal and interest about 3,164
- Jumbo rate at 7.0 percent: monthly principal and interest about 3,329
- Difference: about 165 per month before taxes, insurance, HOA, or PMI
The formula behind these numbers is standard mortgage math: Monthly payment equals [r × L] divided by [1 − (1 + r) to the power of −n], where L is loan amount, r is monthly rate, and n is total payments.
PMI on conforming loans
Private Mortgage Insurance may be required on conforming loans when you put less than 20 percent down. PMI helps you access conventional financing with a smaller down payment. The monthly cost depends on your down payment, credit score, and loan type.
Example using hypothetical numbers:
- Loan amount: 400,000
- PMI rate: 0.6 percent annually
- Annual PMI: 2,400, which is 200 per month
PMI can usually be canceled when your loan-to-value reaches 80 percent by amortization or borrower request, and it often ends automatically at 78 percent. Your loan disclosures will outline the path to cancellation.
Mortgage insurance on jumbo loans
Many jumbo loans do not use standard PMI. Instead, lenders may require a larger down payment, higher credit scores, and significant cash reserves. Some lenders may offer portfolio insurance or a second-lien structure, but pricing and eligibility vary.
Phoenix buyers: finding your fit near the limit
If your budget sits close to the conforming cap in Maricopa County, you have options. Consider these practical strategies to stay within conforming or to make a jumbo loan more attractive.
- Increase your down payment to bring the loan amount at or below the conforming limit. Use the simple equation: required down payment equals purchase price minus the conforming limit.
- Negotiate price or credits to reduce your needed loan amount.
- Explore other programs. FHA, VA, and USDA each have different rules and may be helpful depending on your eligibility and location.
- Consider split financing. Some borrowers pair a conforming first mortgage with a smaller second lien. This approach involves tradeoffs and lender-specific rules.
- Shop multiple lenders. Jumbo pricing and guidelines vary by institution.
Estimating your full monthly cost in Phoenix
Your monthly payment includes more than principal and interest. Property taxes, homeowners insurance, and HOA dues shape the real number you will pay each month. Arizona’s effective property tax rate is often lower than in some states, but rates vary by municipality and assessed value. You can review local details with the Maricopa County Assessor and your city’s resources.
To build a clear estimate, add these together:
- Principal and interest using your quoted rate and term
- Monthly PMI if you plan to put less than 20 percent down on a conforming loan
- Monthly property tax and homeowners insurance based on current local figures
- Monthly HOA dues if applicable
Quick calculator template
Use these inputs to estimate your monthly cost. Replace the rates and PMI with current lender quotes.
Inputs
- Purchase price: ______
- Down payment: ______ or ______ percent
- Loan amount: purchase price minus down payment
- Interest rate: ______ percent, loan term: 30 or 15 years
- PMI rate if applicable: ______ percent annually
- Property tax: ______ per year
- Homeowners insurance: ______ per year
- HOA dues: ______ per month
Outputs
- Monthly principal and interest
- Monthly PMI: loan amount times PMI rate, divided by 12
- Monthly property tax: annual tax divided by 12
- Monthly insurance: annual premium divided by 12
- Total estimated monthly payment
Buyer checklist for Maricopa County
- Step 1: Find the current conforming loan limit for Maricopa County and confirm your unit count.
- Step 2: Calculate your needed loan. Loan equals purchase price minus down payment. Compare it to the county limit.
- Step 3: If loan is at or below the limit, get multiple conforming quotes. If above, review jumbo scenarios or adjust your down payment.
- Step 4: Estimate your full monthly payment by adding P&I, PMI if applicable, property tax, insurance, and HOA.
- Step 5: If PMI is likely, ask your lender for a PMI rate estimate and an amortization schedule that shows when you can cancel.
- Step 6: Review scenarios with your lender and a local agent, including condo eligibility or multi-unit rules if relevant.
Local guidance, personalized to you
Every buyer’s situation is different. Your price range, down payment, credit, and property type all influence whether conforming or jumbo makes more sense. If you want a clear path from budget to keys, our senior-led team is here to help you compare scenarios and align the numbers with your goals in Phoenix and the North Valley.
Ready to map out your options? Request a private consultation with Desert Living AZ.
FAQs
What is a conforming loan limit and who sets it?
- The Federal Housing Finance Agency sets the annual conforming loan limit that defines the maximum loan size for mortgages eligible for purchase by Fannie Mae or Freddie Mac.
What is the current conforming loan limit for Phoenix, AZ?
- Limits change every year. Check the FHFA county-level table for Maricopa County and look up the 1-unit number for the current year before you finalize your budget.
Do multi-unit properties have higher limits in Maricopa County?
- Yes. Duplex, triplex, and fourplex purchases have higher published conforming limits. Verify the correct unit count when you review the FHFA table.
How does PMI work on conforming loans in Phoenix?
- PMI typically applies if you put less than 20 percent down. The cost depends on your down payment, credit score, and loan type, and it can usually be canceled as your equity grows.
Do jumbo loans use PMI like conforming loans?
- Many jumbo programs do not use standard PMI. Lenders often require larger down payments, higher credit scores, and more cash reserves, with pricing and rules that vary by lender.
How do conforming limits affect luxury buyers in Phoenix?
- If your desired price requires a loan above the conforming limit, expect jumbo pricing and stricter underwriting. Options include increasing your down payment, adjusting price, or exploring other programs.
