Fannie Mae And Freddie Mac Announces 2015 Conforming Loan Limits
Fannie Mae and Freddie Mac have maximum conforming limits. Government has announced that there will be no changes with conforming limits in 2015. The no change in conforming lending limits for conforming mortgage loans remains the same for the past several years. FHA lending limits got lowered in 2014 from $410,000 maximum lending limit to $271,000 unless the property was located in a high cost area. The FHFA, or Federal Home Finance Agency, is the decision maker of leaving the 2015 conforming limits the same.
The conforming lending limit for 2015 will remain at $417,000 for single family homes.
What Is A Conforming Loan?
Conforming loans are conventional loans that conform to Fannie Mae and Freddie Mac guidelines . Conforming loans need to meet all of Fannie Mae or Freddie Mac lending guidelines including the maximum loan limit amount in order for Fannie Mae or Freddie Mac to buy the loan from the lender that originates and funds the mortgage loan. If the loan does not conform to Fannie Mae or Freddie Mac guidelines, Fannie Mae and Freddie Mac will not purchase the loan from the mortgage lender or financial institution that originates and funds the loan.
Mortgage loans that exceed the national loan limit of $417,000 are non-conforming loans because they do not conform to Fannie Mae and Freddie Mac loan limit guidelines and are called Jumbo mortgage loans. Jumbo mortgage loans are mortgage loans that is not backed by Fannie Mae or Freddie Mac nor any other government agency. Jumbo mortgage loan lending guidelines depends on the individual Jumbo mortgage lender and are often more tougher and stricter than conforming lending guidelines. Mortgage rates for Jumbo mortgages are often higher and the debt to income ratio caps is often capped at 40% DTI. Most Jumbo mortgage lender require that the mortgage loan applicant have at least a 700 FICO credit score. 20% down payment is often required for a Jumbo loan home purchase. I have Jumbo mortgage loan programs which only require 10% down payment, however, a 740 FICO credit score is required.
Increases In Conforming Limits In Certain Counties: 2015 Update
As mentioned, the national conforming limits for 2015 is capped at $417,000. However, the government has made exceptions to the national conforming lending limits in certain areas of the United States where the median home values and prices exceeds the national average home prices in the United States. These areas are often designated high cost areas and a total of 234 areas in the country have been designated high cost areas. Many areas in California are designated high cost areas. Conforming loan limits in high cost areas vary depending on the amount of units. For a single family home, maximum loan size is capped at $625,000. For a two unit home in a high cost area, the loan limit is $800,775. For a 3 unit home in a high cost area, the loan limit cap is $967,950. For a four unit home in a high cost area, the maximum loan limit is $1,202,925.
The national conforming loan limit is capped at $417,000 for single family homes, $533,850 for a 2 unit home, $645,300 for a 3 unit home, and $801,950 for a 4 unit home.