Good news for people buying a home in an area where home prices are typically higher than the national average:
Fannie Mae and Freddie Mac have announced they will continue the higher loan limits through 2013. Fannie and Freddie are government-owned companies that provide money to banks and mortgage lenders. Accordingly, they set certain rules and guidelines, such as the maximum loan amounts.
Loan Limits are as follows:
$417,000: Maximum loan in areas that do not have a median home price higher than average.
$625,500: Maximum loan in the most costly counties of the country.
By contrast, FHA offers a higher max. loan for the most costly counties: $729,750. Last year, Congress raised FHA loan limits after being urged by the real estate industry to do so.
$506,000: Maximum loan for higher priced counties (King, Pierce, Snohomish) in WA state where I reside.
To find out what the limit is in your county, contact your local loan officer. If you know you’re not in a high-priced area, then you can count on $417,000 as the limit for a conventional loan.
For borrowers who require a larger loan, there are jumbo loan programs available. Typically, these require a higher interest rate and possibly a larger down payment. Pricing and guidelines vary.