Understanding Federal Loan Limits
The Federal loan limits that define conforming and non-conforming loans (by county) can be very confusing for homeowners and buyers, but these limits are relevant and important for consumers to know since the distinction between what constitutes a conforming loan versus a non-conforming loan is what ultimately distinguishes a conventional loan from a super jumbo loan.
In 2008, congress extended “temporary” higher loan allowances for “high cost” areas. These were extended due to the ailing housing industry through September 30th, 2011. This current Congress decided it’s time to cut back the availability of larger loans in these areas which have allowed more home buyers to qualify for conventional loan programs including government-backed loans with lower down payments, higher debt-income allowances, less-stringent asset reserves, and less-than-ideal credit at these higher loan limits than what is allowable for super jumbo loans.
Home buyers who expect to purchase more expensive homes with loans in excess of the new limits will need higher down payments (10% or more), better qualifying credit scores, increased reserves, and more stringent debt-income ratios than what is available in the conforming loan sector. You can check the newly-revised maximum loan limit for your county by going to HUD’s website and entering the County, State, and Fannie Mae loan limits in the appropriate categories online then click “Send”.
Logic would dictate that home buyers who would otherwise expect to purchase homes with lower down payments, or who otherwise might not meet a portfolio lender’s qualification standards for super jumbo financing, may elect to purchase a lower-price home than what is desired or RENT.
If you’re in the market for a home with a price that places your loan into the non-conforming/super jumbo arena, we offer super jumbo loan programs with as little as 10% down. However, if you are interested in a conforming or Government loan, we can also offer you the most competitive rate and terms.
Our super jumbo financing products are limited to California property only. We do NOT finance residential homes outside of California.
Ken Kellogg