The Federal Housing Finance Agency (FHFA) is an independent federal entity created during a restructuring of several other government regulatory bodies. This particular agency reports directly to Congress and exists to guide and supervise other semi-governmental agencies. As part of the oversight agreement from the (FHFA), Fannie Mae and Freddie Mac are only permitted to purchase single-family mortgages with origination balances below a specific amount, known as the conforming loan limit. Originated loan amounts above this guideline are commonly known as jumbo loans. The conforming limit can be seen somewhat as a safety net for consumers and lenders alike. The purpose is to keep properties affordable for homebuyers and loans repayable for mortgage companies. Jumbo loans are more difficult to obtain, and typically require additional paperwork as well as underwriting requirements.
The Purpose of Conforming Loan Limits
The conforming loan limits are designed to provide protection against unjustified inflation in the housing market. Artificial inflation, exaggerated appraisals and other indignities that result from an unregulated industry can produce chaos. The FHFA annually reviews and publishes a list of conforming loan limits applicable to all conventional mortgages that are delivered to Fannie Mae or Freddie Mac. The list varies by the number of living units included within a single property, and there are usually general and high-cost area loan limits. High-cost area loan limits will vary by geographic regions.
VA Loan Limits
Unlike the traditional conforming loan limits for agencies such as Fannie Mae and Freddie Mac, the VA loans are not necessarily so confined into a strict frame. While the conventional loans may have some flexibility for so-called high cost areas, the VA loans are actually determined by individual counties. In addition to the basic county information, there are also special loan limits based on some states and territories. While the VA home loan limits do often parallel the traditional conforming loan limits, there is generally more flexibility with the VA home loan options.
These limits or incentives outlined by specific states may be part of a special program and subject to change without notice. Additionally, the VA loan limits are published and made readily available for potential buyers. The loan amount that a buyer may qualify for may vary based on current loan limits and temporary program incentives. Call or chat with an agent for specific information based on a specific area of interest.
Understanding conforming loan limits may or may not affect the buying decision. Some potential buyers may be considering more than one area of relocation, possible to enjoy retirement. If they discover that they can afford a better home through a larger loan amount, they may opt for that geographic area. Alternatively, some military personnel are facing orders to relocate and do not have a choice about their new headquarters.
For more information or to apply for a VA loan, call 888-573-4496 and speak with an experienced VA Home Loan Centers mortgage counselor today!
Complete VA home loan information, searchable by a specific location is available here. To find loan limits, appraisal fees and funding fee information, please select the desired state or territory from the list below:
To find out VA home loan info (including loan limit, appraisal fees, and funding fee) select your state or territory from the list below:
District Of Columbia
North Mariana Islands
US Virgin Islands