GSE Loan Limits Unchanged Through Q3 2011

Agency conforming loan limits for thernfirst three quarters of 2011 have been set by the Federal Housing FinancialrnAgency (FHFA), and, for the third year in a row they remain unchanged.  In most of the U.S. the maximum loan willrnremain $417,000.  In what are consideredrnto be high property value areas the maximum remains $729,750 but actual loanrncaps are determined on a county by county basis.  These loan limits apply to loans originatedrnfor purchase by Freddie Mac and Fannie Mae and for guarantee by the FederalrnHousing Adminstration (FHA.)  Thernguidelines are usually also utilized for VA guaranteed loans.</p

The maximum figures, will applyrnto all mortgage loans originated before September 30, 2011 and are determinedrnby rules established by the Housing and Economic Recovery Act of 2008 (HERA)rnand the Economic Stimulus Act of 2008 (ESA). rnESA limits are fixed dollar amounts whereas HERA limits must be calculatedrneach year based on local area median home prices.  Each year the HERA calculation is compared tornthe ESA limit and the higher number, which in most cases was the fixed ESArncalculation, prevails.  Even where the ESArncap of $625,500 is the lower of the two calculations, the Federal Housing FinancernAgency (FHFA) has followed its existing policy that permits limits to be revisedrnupward or remain unchanged; they cannot drop.   Thus, despite the substantial downward driftrnof home prices in many areas, the loan limits remain, in most cases, unchanged.</p

For mortgage loans originatedrnafter September 30, 2011, the ESA rules will be used to determine limits andrnthe maximum of $625,500 will apply.</p

The second mortgage loan limitsrnfor 2011 is set at $208,500 for purchases in the contiguous United States andrn$312,750 in Alaska, Guam, Hawaii, and the Virgin Islands.  The sum of the original loan amounts of thernfirst and second mortgages, however, cannot exceed the maximum loan limits forrnsenior liens in the applicable location. rn</p

Where a mortgage has beenrnmodified, it can only be resold to Fannie Mae if the original loan amount didrnnot exceed the current loan limits even if the balance was paid subsequentlyrnpaid down below that amount.  </p

HERE is a tool to determine the max agency loan amount in your county

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