When you're looking for low rates on a 30-year fixed rate mortgage, the cheapest place to find it is usually the conforming mortgage market.

Conforming mortgages are appropriately named; they "conform" to the mortgage underwriting guidelines of Fannie Mae or Freddie Mac.   Mortgages that meet these criteria are later sold and securitized on Wall Street as mortgage-backed bonds.

But no matter how strong a mortgage applicant's approval triangle, conforming loans are still limited by dollar size.  The 2009 conforming loan limits, as released by the government, are:

• 1-unit properties : $417,000
• 2-unit properties : $533,850
• 3-unit properties : $645,300
• 4-unit properties : $801,950

However, maximum conforming loan limits don't apply to all housing markets equally. 

Areas designated by the government as "high-cost" get the benefit of higher loan size limits based on typical home prices throughout the region.  A condo in the San Francisco-Oakland-Fremont area, for example, is conforming up to $625,500.  By comparison, a home in Mason, Ohio is capped at $417,000.

And too bad for residents of Chicago. 

Because its statistical region includes Naperville and Joliet and everything in between, Chicago is not designated as high-cost even though it has Lincoln Park, Lakeview, Gold Coast and Streeterville to pull up the averages.

There are 59 designated high-cost regions in the U.S., most of which are in California.  For everyone else, the 2009 conforming loan limit is $417,000.  Loans in excess of the 2009 conforming loan limits are commonly called "jumbo", or "super jumbo", depending on their size.

Now, as a very important note, remember conforming loan limits are for conforming mortgages only.  I know that's stating the obvious, but people often meld conforming guidelines and FHA guidelines in their head.  To date, 2009 FHA loan limits have not been specifically published, although the government has given guidance on the matter. 

It reads like nonsense.  And the same goes for niche lenders for large loans -- 2009 conforming loan limits do not apply.

"Conforming" is a Fannie Mae convention so if your loan is not destined for sale and securitization on Wall Street, the loan limits don't apply to you.  This is why we keep hammering home the point -- if you've got a jumbo or super-jumbo home loan in the works, think local instead.  The fees are less and the rates are better.

Lookup your area's conforming loan limits on the HUD Web site, or email me for help.

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.