Fannie Mae Releases 2007 Conforming Loan Limits
Sunday, December 17th, 2006The Federal National Mortgage Association, sometimes known as FNMA or “Fannie Mae,” a corporation sponsored by the U.S. government, recently released the conforming loan limits for 2007.
The conforming loan limit is the maximum dollar amount of a loan Fannie Mae will purchase to be bundled up in the secondary mortgage market to be sold off as a mortgage-backed security. This limit is broken up into four categories: one-unit properties, two-, three-, and four-family properties. It is also further separated by state/territory (Alaska, Hawaii, Guam, and the U.S. Virgin Islands share a limit 50% higher than the rest of the country). For most purposes, the one-unit (single-family property) is the limit to consider.
What does this mean for borrowers? It means any loan amount falling into the annual limit will have a better chance of ultimately being sold to Fannie Mae, which usually means a lower interest rate on your loan.
There are two commonly used terms when describing loan sizes: “conforming” and “non-conforming.” Non-conforming loans are also sometimes called “jumbo” loans. If your loan amount is above the conforming loan limit, you can expect to have an interest rate anywhere between 0.25% to 0.75% higher than if it fell into the conforming limit.
Here are the 2007 conforming loan limits, which are the same as the 2006 limits:
| One-unit: | $417,000 |
| Two-family: | $533,850 |
| Three-family: | $645,300 |
| Four-family: | $801,950 |