The Conforming Limit of the Jumbo Mortgage
You're ready to buy a house, but it's a pricey one. In fact, it's so expensive that you think you may need to apply for a jumbo mortgage loan. As the name suggests, the dollar amounts of these mortgage loans are higher -- often far higher - than the conforming loan limits set by by the Federal Housing Finance Authority for loans originated by Fannie Mae and Freddie Mac. Whether you need to apply for a jumbo mortgage, though, depends upon where you live.
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Conforming Loan Limits
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Under federal law, the quasi-government lending agencies Fannie Mae and Freddie Mac are only allowed to originate mortgage loans of certain sizes. The conforming loan limits vary for different parts of the country. For most areas, though, you'll have to apply for a jumbo loan if you need to finance more than $417,000. That's the conforming loan limit for general areas.
High-Cost Areas
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Certain areas of the country, including many in California, New York and other expensive real estate markets, are deemed high-cost areas. In these areas, the conforming loan limit can rise as high as $729,750. If you live in a high-cost area, then, you'll only have to apply for a jumbo loan if you want to finance more than this amount.
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Number of Units
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Conforming loan limits change if you are applying for a loan with more than one living unit. For instance, if you're financing a home with two living units, the conforming loan limit jumps to $533,850 in most parts of the country. In high-cost areas, the loan limit can rise as high as $934,200. For a house with three living units, the conforming loan limit in most areas stands at $645,300. For high-cost areas, it can soar to as high as $1.129 million. Again, if you need to finance more than these amounts for multi-unit residences, you'll have to apply for a jumbo loan.
Alaska, Hawaii Execptions
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Two states have different conforming loan limits than does the rest of the country. Not surprisingly, it is the two states that lie outside the continental United States, Alaska and Hawaii. In both states, the conforming loan limit in regular-cost areas stands at $625,500. For high-cost areas, this limit rises to as much as $938,250. These are also the conforming loan limits for Guam and the U.S. Virgin Islands.
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