Conforming & Jumbo Loan Limits
Conforming Loans
A loan that conforms to the guidelines established by Fannie Mae or Freddie Mac. These guidelines establish the maximum loan amount, down payment, borrower credit & income requirements, and suitable properties. Lenders that make loans established to these guidelines may sell those loans to Fannie Mae or Freddie Mac. These lenders may retain the servicing on these loans so that a borrower will continue to make payments to the original lender. Conforming loans make up the majority of loans in the U.S.
Fannie Mae and Freddie Mac have announced their revised loan limits for 2008. Effective March. 5, 2008. These limits will replace the old limits of $417,000.
|
2008 Conforming Loan Limits |
Guidelines |
||
|
No. of Units |
Contiguous States, District of Columbia and Puerto Rico |
Alaska, Hawaii & Virgin Islands |
Maximum Loan Limit Percentage |
|
1 |
$729,750 |
$1,094,625 |
95% / 5% down |
|
2 |
$934,200 |
$1,401,300 |
90% / 10% down |
|
3 |
$1,129,250 |
$1,693,875 |
80% / 20% down |
|
4 |
$1,403,400 |
$2,105,100 |
80% / 20% down |
Non-Conforming Loans
A loan that does not conform to the guidelines established by Fannie Mae or Freddie Mac is called a non-conforming loan or jumbo loan. A loan that is "higher" than the conforming loan limit is called a Jumbo Loan. There are also Super Jumbo Loans (loan amounts > $900,000). Loans that do not meet the credit quality of conforming loans ('A' paper) are called 'B','C' and 'D' paper loans. Second mortgage loans - credit lines, home equity loans, home improvement loans are also non-conforming loans.
FHA Loans
Loans that are government insured and allow low down payments for people with lower incomes. Borrowers typically qualify with higher debt to income ratios. See the California FHA Loan Limits. For all other states please click here.
Portfolio Loans
Loans may be sold on the secondary market to Fannie Mae, Freddie Mac or a select number of conduits (e.g. GE Capital) or they may be kept in the banks portfolio. Portfolio loans may have more flexible qualifying criteria, while saleable loanshave to meet an investors criteria with standard documentation or requested documents.
Commercial Loans
Loans programs discussed above are for 1-4 unit residential properties. For 5+ unit residential properties, office buildings, warehouses and other commercial property refer to the Commercial Mortgage Application.
NOTE: The loan limits above apply to "owner occupied" only for purchase and rate & term refinance. If your requested loan doesn't fit into the above guidelines then it can still be financed with competitive rates and terms.
