Help understanding the $417K limit on home loans

[Alex_angel]

I hope that someone with the know can help me understand the $417k limit on home loans. Why is there a limit if they will still give you a higher loan and just call it Jumbo? Why doesn’t california have a higher limit? Why is it that someone in Ohio can buy a home and get a standard home loan, yet someone here in California has to either be able to put up 30% down or else get a JUMBO loan with a higher rate.
Honestly, who in california can get anything other than a JUMBO loan without having to drop $200k on a home.
TIA

[HLS]

Alex,

The conforming loan limits adjustments are based on the October-to-October changes in the mean (average) home price, as published by the Federal Housing Finance Board (FHFB). The FHFB figures come from its monthly survey of lenders. Both new and existing homes are included in the survey.

Prior to the last week, the situation simply was that loans that “conformed” to FNMA and FHLMC guidelines were purchased by them, up to their $ limits.

Loans that were above this, were “jumbo” and sold off on Wall Street into the securities market.

Below is the “official” stance:

As of January 1st, 2006, the conforming loan limits, set by The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) for single-family and multi-unit properties in Florida, and other contiguous States, District of Columbia and Puerto Rico will be increased as follows:

One-family maximum $417,000
Two-family (or duplex) maximum $533,850
Three-family (or tri-plex) maximum $645,300
Four-family (or quad-plex) maximum $801,950

The maximum loan limit for one-to-four-family mortgages in Alaska, Guam, Hawaii and the U.S. Virgin Islands are 50% higher than the limits set for the rest of the United States:

One-family maximum $625,500
Two-family (or duplex) maximum $800,775
Three-family (or tri-plex) maximum $967,950
Four-family (or quad-plex) maximum $1,202,925

Conforming mortgage loans are mortgages that “conform” to the loan sizes that may be purchased by FNMA or FHLMC.

I have a connection who works for FNMA… I will see if I can get any indication from him about whether or not they are considering raising the limit for CA.

[HLS]

Alex,

The conforming loan limits adjustments are based on the October-to-October changes in the mean (average) home price, as published by the Federal Housing Finance Board (FHFB). The FHFB figures come from its monthly survey of lenders. Both new and existing homes are included in the survey.

Prior to the last week, the situation simply was that loans that “conformed” to FNMA and FHLMC guidelines were purchased by them, up to their $ limits.

Loans that were above this, were “jumbo” and sold off on Wall Street into the securities market.

Below is the “official” stance:

As of January 1st, 2006, the conforming loan limits, set by The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) for single-family and multi-unit properties in Florida, and other contiguous States, District of Columbia and Puerto Rico will be increased as follows:

One-family maximum $417,000
Two-family (or duplex) maximum $533,850
Three-family (or tri-plex) maximum $645,300
Four-family (or quad-plex) maximum $801,950

The maximum loan limit for one-to-four-family mortgages in Alaska, Guam, Hawaii and the U.S. Virgin Islands are 50% higher than the limits set for the rest of the United States:

One-family maximum $625,500
Two-family (or duplex) maximum $800,775
Three-family (or tri-plex) maximum $967,950
Four-family (or quad-plex) maximum $1,202,925

Conforming mortgage loans are mortgages that “conform” to the loan sizes that may be purchased by FNMA or FHLMC.

I have a connection who works for FNMA… I will see if I can get any indication from him about whether or not they are considering raising the limit for CA.

[HLS]

Alex,

The conforming loan limits adjustments are based on the October-to-October changes in the mean (average) home price, as published by the Federal Housing Finance Board (FHFB). The FHFB figures come from its monthly survey of lenders. Both new and existing homes are included in the survey.

Prior to the last week, the situation simply was that loans that “conformed” to FNMA and FHLMC guidelines were purchased by them, up to their $ limits.

Loans that were above this, were “jumbo” and sold off on Wall Street into the securities market.

Below is the “official” stance:

As of January 1st, 2006, the conforming loan limits, set by The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) for single-family and multi-unit properties in Florida, and other contiguous States, District of Columbia and Puerto Rico will be increased as follows:

One-family maximum $417,000
Two-family (or duplex) maximum $533,850
Three-family (or tri-plex) maximum $645,300
Four-family (or quad-plex) maximum $801,950

The maximum loan limit for one-to-four-family mortgages in Alaska, Guam, Hawaii and the U.S. Virgin Islands are 50% higher than the limits set for the rest of the United States:

One-family maximum $625,500
Two-family (or duplex) maximum $800,775
Three-family (or tri-plex) maximum $967,950
Four-family (or quad-plex) maximum $1,202,925

Conforming mortgage loans are mortgages that “conform” to the loan sizes that may be purchased by FNMA or FHLMC.

I have a connection who works for FNMA… I will see if I can get any indication from him about whether or not they are considering raising the limit for CA.

[Author]

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