2015 Nationwide Conforming Loan Limits
Even though some counties did increase the 1-unit loan limit, the max loan for any conforming loan is $417,000.
Any amount over $417,000 up to the max county high-cost loan limit is considered a High Balance conforming loan.
Any amount over the High Balance limit is considered Jumbo financing.
What Loans Are Covered Under Conforming?
All conventional loans by way of Fannie Mae and Freddie Mac have to stay within these loan limits. In addition VA also follows these loan amounts. Even though VA does not have a maximum loan limit you are still required to pay 25% of the difference between the county loan limit and the purchase price.
Who Sets The Conforming Loan Limits and How Do They Determine What They Will Be?
The Housing and Economic Recovery Act of 2008 (HERA) created a formula to determine what the max loan limit should be for each county. Each year the loan limits are based on the median home prices from October to October reported by the Federal Housing Administration (FHFA). By law Fannie Mae and Freddie Mac cannot exceed the loan limits.
What is a High Balance Conforming Loan?
Some counties have higher median home prices that are considered high-cost areas. Through various legislative acts FHFA is able to increase loan limits in certain high-cost areas around the United States. Basically, it just means that the loan amount exceeds the max conforming loan limit of $417,000 but is still below the high cost loan limit for that county. Keep in mind that you may have a slightly higher interest rate with High Balance loan amounts.
What If My Loan Balance is Over The Conforming or High Balance Loan Amount?
If your loan balance is over the loan limit for that particular county your loan is considered a non-conforming loan or more commonly known as a Jumbo loan. With a jumbo loan you will have a different set of qualifying conditions you will need to meet. For instance a larger minimum down payment, interest rate may be higher, credit score requirements are different and reserve requirements are different. The main reason is that jumbo loans are a higher risk to lenders and banks, so they require a bit more to reduce their lending risk.
Call or email if you have any Questions about Conforming Loans or Loan Amounts.