For the tenth consecutive year, the Federal Home Finance Agency (FHFA) is leaving its conforming mortgage loan limits as-is.
2015 conforming loan limits will rest at $417,000 for a single-family home, which is the same as the prior-year levels. The FHFA's decision to leave its mortgage loan limits unchanged helps existing U.S. homeowners to refinance; and gives today's home buyers access to government-backed home loans with low mortgage rates.
The FHFA 2015 loan limits are effective as of January 1, 2015 and apply to conventional mortgages made nationwide, including purchase loans and refinance transactions.
Conventional mortgages are available via Fannie Mae and Freddie Mac.
Loan limits are appropriately named. They are the maximum allowable loan size for a mortgage. Loan limits vary by product and region, and specified within a loan program's given mortgage guidelines.
Loans which exceed an FHA loan's local loan limit cannot be insured and loans exceeding a VA loans local limit cannot be guaranteed.
For conforming loans -- loans backed by Fannie Mae or Freddie Mac -- loan limits have been unchanged since 2006 when the government moved to raise the national limit to $417,000.
Conforming loans which exceed a local loan limit are commonly known as "jumbo loans". Jumbo loans are typically not backed by Fannie Mae or Freddie Mac, and are offered by local and national banks.
Jumbo mortgage rates are sometimes higher and sometimes lower as compared to conforming ones. However, because jumbo loans are not government-backed, eligibility requirements are often more stringent.
There aren't many low-downpayment options in the jumbo mortgage market; and, income and credit score requirements are often higher for jumbo loans. This is why the decision to leave the 2015 conforming loan limits unchanged is an important one.
With conforming loan limits held at $417,000 for at least one more year, homeowners using conventional programs to refinance -- such as HARP -- and buyers using Fannie Mae's 5% downpayment program to purchase can get access to the lowest mortgage rates possible at the largest loan size available.
Fannie Mae and Freddie Mac have elected to make no change to conforming loan limits for 2015. Loan limits have been unchanged since 2006, when maximum loan sizes were raised to $417,000.
Then, between 2007-2011, despite rapidly falling home values, officials moved to keep conforming loan limits as-is. This ran counter to prior government strategy, which was to raise loan limits when home values climbed; and, to lower loan limits when home values dropped.
In 2007, though, officials defended their inaction by citing the want to make mortgage credit available to U.S. home buyers during a crucial stage of the housing market's recovery.
Reinforcing this point in 2009, conforming loan limits were then raised in certain "high-cost" areas nationwide; areas in which the median home sale price handily exceeded the national average.
The government has designated 234 high-cost areas nationwide including New York City, New York; Los Angeles, California; and the entire San Francisco-San Jose-Oakland metropolitan region.
No U.S. counties will experience a decline in conforming loan limits for 2015.
The baseline, non-high-cost conforming loan limits for 2015 are :
High-cost conforming loan limits range up to $625,000 for a one-unit home; $800,775 for a two-unit home; $967,950 for a three-unit; and $1,202,925 for a four-unit. In Hawaii, loan limits are even higher.
The national 2015 conforming mortgage loan limits remain unchanged from 2014, but there are 46 U.S. counties in which local mortgage loan limits have been increased.
These are areas in which the median home sale price increased last year. These counties are now considered "high-cost".
5 counties in Massachusetts (Essex County, Middlesex County, Norfolk County, Plymouth County, and Suffolk County) received a $47,500 raise in their local conforming loan limit.
Along with the $47,500 increase granted to New Hampshire's Rockingham County and Strafford County, these were the largest annual increases nationwide.
Ventura County, California, received a modest increase of just $5,750.
A complete list of the U.S. counties granted an increase to their 2015 local conforming loan limits, with a comparison against 2014 loan limits, follows:
All other U.S. counties are bound by the $417,000 local loan limit established for 2015 for single-family homes.
Not everyone's mortgage will fit within the 2015 conforming loan limits.
The good news is that homeowners and home buyers whose loan size exceeds conforming loan limits can still get financed. There are several home loan options. One such option is to get an FHA-backed loan.
FHA loans are loans insured by the Federal Housing Administration and loan limits for FHA loans can be higher than for a comparable conventional loan. In high-cost areas, the FHA will insure a loan up to $625,500.
FHA loans allow for low downpayments of just 3.5 percent and the agency is often more flexible with its loan approvals than either Fannie Mae or Freddie Mac.
Via its FHA Back to Work program, for example, the FHA will allow loans for a home buyer who is just 12 months removed from a bankruptcy, foreclosure or short sale. You can't do that with a conventional loan.
Borrowers over the conforming loan limit can use VA loans, too.
VA loans are loans guaranteed by the Department of Veterans Affairs. Like FHA loans, VA loans can be made at larger sizes than conforming ones. However, VA loans are available to military borrowers only.
Among the remaining ways to get financed are USDA loans for homes in non-urban city centers; and jumbo and private loans made by local and retail banks.
Conforming loan limits are unchanged for 2015, which marks the ninth straight year for which the national limit is $417,000. Loan limits, however, will vary by state and county -- sometimes by a lot.
Find your 2015 local conforming loan limit and get an instant mortgage rate quote. Rates are available online at no cost and with no obligation to proceed. Your social security number is not required to get started.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2015 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.