Size Does Matter: Some Loan Amounts Are Bigger Than Others

October 22nd, 2012

The maximum loan size on mortgages varies from area to area. Most people are aware that the Conforming loan limit can be extended in high cost areas, which are typically the more urban, high cost markets. But many people are not aware that the Conforming loan amounts as well as the Conforming High Balance loan limits vary from area to area, based on a formula using median sales price information for the area. So a Conforming loan can be raised to a higher loan limit in a high cost market, and then it is called a Conforming High Balance loan.

Conforming loan amounts have the lowest rates, then Conforming High Balance have a small premium. And any loan amount you wish to borrow that goes above the Conforming High Balance loan limits is considered a Jumbo loan, and charged an even higher rate. But the limits for all Conforming loans, both Conforming and Conforming High Balance, can vary.

I wrote about the three types of loan sizes, Conforming, Conforming High Balance, and Jumbo, click here for more.

If you are buying a home in the Washington DC metro area the Conforming High Balance loan limit for a Conventional loan is $625,500; but only 45 minutes outside DC in Baltimore the limit is only $494,500. In Los Angeles CA the limit is $625,500 in the above scenario, but 1.5 hours outside LA in Riverside County the maximum loan limit is only $417,000. Although FHA allows for higher loan limits in both of the above scenarios, this discussion is only for Conventional loans.

To see a spreadsheet that shows all the Fannie Mae Conforming loan limits for the whole country click here.

And you can use the Fannie Mae Geocoder tool for Conventional Conforming loans if you have a property address, click here.

For FHA loans click here.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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