As part of the 2009 stimulus package, Congress increased the conforming mortgage loan limit from $417,000 to as high as $729,750 in high-cost part around the county.

The recently-confirmed 2010 conforming loan limits extend the stimulus.

To be classified as "high-cost", an area's median home price must exceed $365,000.  324 areas qualify nationwide and, in each of those locales, the conforming loan limit was modified to 115% of the respective region's median home price.

Neither Chicago nor Cincinnati made the list, however.  This is because lower-cost homes co-exist with higher-cost ones, acting as a median price anchor across the region.

As a result, areas are relegated to the 2010 $417,000 conforming loan limit despite the "average" home selling for much more than that.  Areas like:

• Lake County, Illinois
• Indian Hill, Cincinnati, Ohio
• Lincoln Park, Chicago, Illinois
• Hyde Park, Cincinnati, Ohio
• Streeterville, Chicago, Illinois

For these town residents, a $417,000 mortgage doesn't get the job done.  Homes routinely sell for $1 million or more and few homeowners want to make the downpayment to make up the difference.  Fannie Mae's loan limits are too small, in other words, so homeowners are forced to find other options.

With respect to those "other options", the pricing can get ugly.

Loans too large for Fannie Mae and Freddie Mac are commonly called "jumbo mortgages" or "super-jumbo mortgages", depending on their size.  From 2002-2007, jumbo mortgages were easy to get because investment banks, hedge funds and other financial firms were competing to invest in them.  This held rates low and guidelines loose.  Qualifying for a jumbo mortgage was easy.

Today, however, the story's a bit different.

If you've been shopping for jumbo mortgages at your bank, you already know -- jumbo mortgages are downright expensive.  Rates are high, fees are high, and banks are non-apologetic their product mix.

There is another way to get it done, though.

See, the terms "jumbo" and "super jumbo" -- these are words for a Conforming Mortgage World, as if Fannie Mae and Freddie Mac were the only games in town.  They're not.  On the contrary, if you can find your way off the beaten mortgage path, you'll discover a whole world of lenders who can help.

These little-known banks are "niche lenders", the banks of Main Street, America.  Different from Too-Big-To-Fail Banks, the smaller ones like to keep the loans on their books.  Without an "end investor", per se, Main Street banks have the freedom to underwrite as they see fit.

To a Main Street bank, $417,000 is just another number.

Main Street mortgage lenders do things that Fannie Mae or lenders making FHA home loans wouldn't touch:

• PMI not required above 80% loan-to-value
• Cash due at closing can be a 100% gift
• Closing within a LLC or other entity is permitted

Furthermore, the rates are amazing.

As an example, I'm currently quoting a $1,500,000, 7-year ARM at 4.125 percent (APR 4.192).  The 5-year ARM was 3.875 (APR 4.011).  Meanwhile, I tried to shop the same scenario with a Big Bank in Cincinnati for comparison's sake.  The bank wouldn't even consider the loan for me, let alone price it.

There are other examples, too.  Niche lenders do things like:

• $900,000 cash out mortgage with 10 percent equity, primary residence
• $2.0 million mortgage at 60 percent LTV, primary residence
• $3.0 million mortgage at 50 percent LTV, vacation home

Finding a Main Street-type lender isn't always easy, but it's worth the extra effort. Mortgage rates tend to be lower, downpayment requirements tend to be smaller, and the underwriting process is usually smoother. As a loan officer, I work with a lot banks like this.

If you're having trouble finding a bank to service your "large loan" or just want a second opinion, with your scenario and I'll point you in the right direction.  If I can't help you directly, I may know somebody who can.