New Loan Limits for Conventional Mortgages

Do you have your heart set on a home listed around $400,000 but your lender explained to you that this would require a “Jumbo” loan and you would be charged a higher interest rate? Have I got good news for you!

You might want to hold off until after your New Year's Eve celebration!

Fannie Mae announced that it will apply new conforming loan limits, as determined by the Office of Federal Housing Enterprise Oversight based on federal data on average home prices, to increase its single-family mortgage loan limit to $417,000 for 2006, effective January 1. 2006

What does this mean to you? In 2005, the limit was $359,650. Any property purchased above that price was considered non-conforming and higher interest rates applied.

Fannie Mae estimates that in 2006, as many as an additional 466,326 homeowners nationwide would be eligible for a conforming loan.

Interested in an investment property? Limits for multi-unit loans increased too!

2005

One-unit mortgages are limited to $359,650
Two-unit mortgages $460,400;
Three-unit mortgages $556,500;
Four-unit mortgages $691,600.

2006

1 Unit $417,000
2 Units $533,850
3 Units $645,300
4 Units $801,950