What are Conforming, High Balance and Jumbo Loan Programs?

What are Conforming, High Balance and Jumbo Loan Programs?
Conforming Loans are loans that meet Fannie Mae (FNMA) and or Freddie Mac (FHLMC) underwriting requirements. In other words, income, credit, and property requirements must meet nationally standardized guidelines. There are additional guidelines, pricing and restrictions regarding conforming loans for manufactured housing. Conforming loans are subject to loan amount limits that are set annually by Fannie Mae and Freddie Mac. These limits vary based on the region in which the subject property is located as well as the number of legal units contained in the subject property. Under the FNMA and FHLMC Charter Acts, the loan limits are 50% higher for first mortgages in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. When FNMA and FHLMC limits don’t cover the full loan amount, the loan is referred to as a jumbo mortgage. The average interest rates on jumbo mortgages are typically higher than for conforming mortgages. A high-balance mortgage loan is between a “conforming” and a “jumbo” loan. The loan amounts for a high-balance loan depend on the county you live in. Rates on a high-balance loan are typically higher than conforming but less than jumbo. Jumbo investors may have additional overlays and qualification requirements above FNMA/FHLMC.
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