Conforming loan limits are the maximum mortgage loan amount that will be accepted by the government sponsored entities -- GSE -- of Fannie Mae and Freddie Mac. Freddie and Fannie are the major purchasers of newly originated home mortgages in the U.S., and a conforming loan will have a lower rate than a jumbo loan for amounts higher than the conforming limits.
Standard and High Limit Loans
The mortgage loan limits for the GSE's are set by the Federal Housing Financing Authority -- FHFA. A single set of loan limit is set for the entire country. The loan limits are for single-family housing and multifamily housing including up to four units. High-cost housing areas will have higher conforming limits to ensure the GSEs can offer loans to a sufficient number of home buyers in the areas. High-cost area limits are set by zip code, metropolitan area and/or county.
Standard Conforming Limits
The national conforming loan limits apply to any area of California not designated as a high-cost housing area. Thirty-three of the state's 58 counties have the standard conforming limits. The single-family loan limit for these areas is $417,000. The multifamily loan limits for two through four units are $533,850, $645,300 and $801,950, respectively. These counties tend to be the inland, rural or mountainous areas of California.
Major Metropolitan Areas
The metropolitan areas of Los Angeles and San Francisco have the highest conforming loan limits in California. The limits for one through four units are $729,750, $934,200, $1,129,250 and $1,403,400. Included in these metropolitan areas are Ventura County and the Santa Barbara area. In the north, Monterey, Santa Cruz and Napa counties and the San Jose metro area are included at the same conforming rates as San Francisco.
Other High Cost Areas
Other metropolitan areas with higher than standard conforming loan limits are San Diego with a single-family limit of $697,500, the Riverside-San Bernadino-Ontario metro area at $500,000, Stockton with a limit of $488,750, Truckee at $562,500, Vallejo-Fairfield metro area at $557,500 and the Sacramento metropolitan area with a limit of $580,000. Counties with high-cost loan limits include San Luis Obispo with a limit of $687,500, Sonoma County at $662,500, Mono County limited to $529,000 and Alpine County at $547,500.
The listed conforming loan limits were in effect at the time of publication. In September 2010, the limits for high cost areas were kept at a higher level through the end of September 2011. At that time the limits for high cost areas were scheduled to decrease significantly. For example, San Francisco and Los Angeles would drop to $625,000 for single family homes. The loan limits for high cost area would be increased only by congressional action.