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Conventional Loans

Learn more about a Conventional Home Loan.

WHAT IS A CONVENTIONAL HOME LOAN?

A conventional home loan is not actually guaranteed by any government organization, including the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).

CONVENTIONAL 97

The Conventional 97 home loan program is available to all United States homeowners via Fannie Mae and Freddie Mac.

The Conventional 97 is a three percent down payment mortgage program. The 3% down payment may come as a gift to many new homebuyers. It’s more aggressive than the FHA’s benchmark mortgage product because the guidelines are a bit simpler and less restrictive.

Here are some of the most common questions about the Conventional 97 mortgage, along with some answers:

CONFORMING LOAN LIMITS FOR 2015

Fannie Mae and Freddie Mac have decided to make no changes to the conforming loan limits for 2015. Loan limits have been unchanged since 2006 when maximum loan sizes were raised to $417,000.

Between 2007 and 2011, despite rapidly falling home values, officials decided to keep conforming loan limits unchanged. This ran against the previous government strategy, which raised loan limits as home values climbed and lowered loan limits when home values dropped.

Reinforcing this in 2009, the conforming loan limits were raised in certain “high cost” areas nationwide and areas where the median home sale price exceeded the national average. The government considers 234 areas high-cost nationwide, including New York City, Los Angeles, and the San Francisco-San Jose-Oakland region.

The baseline, non-high-cost conforming loan limits for 2015 were:

1-Unit homes: $417,000
2-Unit homes: $533,850
3-Unit homes: $645,300
4-Unit homes: $801,950

High-cost conforming loan limits range from $625,000 for a one-unit home, $800,775 for a two-unit home, $967,950 for a three-unit home, and $1,202,925 for a four-unit home. In the state of Hawaii, the loan limits are even higher.

LOAN LIMITS INCREASE IN 46 COUNTIES

The 2015 conforming mortgage loan limits were unchanged from 2014, but there were 46 counties across the country where local mortgage loan limits were raised. These are areas in which the median home sale price increased last in 2014 and are now considered “high-cost.”

There were 5 counties in Massachusetts (Essex, Middlesex, Norfolk, Plymouth, and Suffolk) that received a $47,500 raise in the local conforming loan limit. Along with the $47,500 increase granted to New Hampshire’s Rockingham and Strafford counties, these were the largest annual increases nationwide. Ventura County, California received a more modest rise of only $5,750.

A complete list of the United States counties which were granted an increase to the 2015 local conforming loan limits, compared with 2014 loan limits, is as follows:

Monterey County, California Loan Limit 2015: $502,550 (2014: $483,000)
Napa County, California Loan Limit 2015: $615,250 (2014: $592,250)
San Diego County, California Loan Limit 2015: $562,350 (2014: $546,250)
Ventura County, California Loan Limit 2015: $603,750 (2014: $598,000)
Adams County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Arapahoe County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Boulder County, Colorado Loan Limit 2015: $456,550 (2014: $417,000)
Broomfield County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Clear Creek County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Denver County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Douglas County, Colorado Loan Limit  2015: $424,350 (2014: $417,000)
Elbert County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Gilpin County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Jefferson County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Park County, Colorado Loan Limit 2015: $424,350 (2014: $417,000)
Essex County, Massachusetts Loan Limit 2015: $517,500 (2014: $470,350)
Middlesex County, Massachusetts Loan Limit 2015: $517,500 (2014: $470,350)
Norfolk County, Massachusetts Loan Limit 2015: $517,500 (2014: $470,350)
Plymouth County, Massachusetts Loan Limit 2015: $517,500 (2014: $470,350)
Suffolk County, Massachusetts Loan Limit 2015: $517,500 (2014: $470,350)
Anne Arundel County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Baltimore city, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Baltimore County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Carroll County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Harford County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Howard County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Queen Anne’s County, Maryland Loan Limit 2015: $517,500 (2014: $494,500)
Rockingham County, New Hampshire Loan Limit 2015: $517,500 (2014: $470,350)
Strafford County, New Hampshire Loan Limit 2015: $517,500 (2014: $470,350)
Cannon County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Cheatham County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Davidson County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Dickson County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Hickman County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Macon County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Maury County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Robertson County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Rutherford County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Smith County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Sumner County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Trousdale County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Williamson County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
Wilson County, Tennessee Loan Limit 2015: $425,500 (2014: $417,000)
King County, Washington Loan Limit 2015: $517,500 (2014: $506,000)
Pierce County, Washington Loan Limit 2015: $517,500 (2014: $506,000)
Snohomish County, Washington Loan Limit 2015: $517,500 (2014: $506,000)

All other counties are still bound by the $417,000 loan limit established for 2015 for single-family homes.

If you have any questions about Conventional Loans, contact USAFC Realty.

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