Conventional loans are secured by government sponsored entities or GSEs such as Fannie Mae and Freddie Mac. Conventional loans can be made to purchase or refinance homes with first and second mortgages on single family to four family homes. Downpayments as low as 3% are now available!
In general, Fannie Mae and Freddie Mac's single family, first mortgage loan limit is $417,000 in 2011. This limit is reviewed annually and, if needed, changed to reflect changes in the national average price for single family homes.
As part of the economic recovery efforts, temporary "high balance" loan limits have been implemented and they vary by county but most of the SF Bay Area counties allow a $729,750 loan amount on a 1-unit property. Call us for the limit in your county.
2011 Conventional Loan Limits
- One-family loans: $417,000
- Two-family loans: $533,850
- Three-family loans: $645,300
- Four-family loans: $801,950
Note: Maximum original loan amounts are 50 percent higher for first mortgages on properties in Alaska, Hawaii, Guam and the U.S. Virgin Islands.
- Second mortgages have become very restrictive due to the foreclosure crisis and liquidity needs of the banks. Call us for personalized info.
- Loans which are larger than the limits set by Fannie Mae and Freddie Mac are called jumbo loans. Because jumbo loans are not funded by these government sponsored entities, they usually carry a higher interest rate and some additional underwriting requirements. A strategy to lower your overall interest payments if your purchase or refinance balance is above $417,000 is to use a combination of both first and second mortgages. Every situation is different, but it is one more option to consider.
In addition to common loan structures such as fixed rate, adjustable rate and balloon loans, Fannie Mae and Freddie Mac also have loan programs for low to no down payments, community lending and affordable housing initiatives, and reverse mortgages.