In the United States, the appropriate loan is a mortgage loan in accordance with GSE guidelines (Fannie Mae and Freddie Mac). The best-known guide is the size of the loan, which in 2018 is generally limited to $ 453,100 for a single family home in the US continent. Other guides include borrower's loan-to-value ratio (ie down payment size), debt to earnings ratio, credit score and history, documentation requirements, etc.
In general, any loan that does not meet the guidelines is an unsuitable loan. Loans that do not meet specific guidelines because the loan amount exceeds the guideline limit are known as jumbo loans.
Video Conforming loan
History
Beginning in 1970, Fannie Mae was authorized by the United States Government to purchase mortgage housing loans. Fannie Mae worked with Freddie Mac to develop uniform mortgage documents and national standards for what came to be known as the corresponding loan.
Maps Conforming loan
Importance
Fannie Mae and Freddie Mac continue to be in the market to adjust the loan; Therefore, suitable loans benefit from greater liquidity than unsuitable loans.
Criteria
The Federal Housing Finance Agency (FHFA) publishes the corresponding annual lending limit that determines mortgages that Fannie Mae and Freddie Mac can buy. The maximum loan amount is set based on the October-October change for the average house price, above that the mortgage is considered a jumbo loan, and usually has a higher rate associated with it. This is because both Fannie Mae and Freddie Mac only buy the appropriate loan, to repackage to the secondary market, making the demand for unsuitable loans much less. Under the law of supply and demand, then, it is more difficult for the lender to sell the loan, so it will be more expensive for the consumer (usually 1/4 to 1/2 percent.)
A temporary increase in the Loan Limit Matches for high-cost areas are included in the 2008 economic stimulus package. Congress passed a single family residence limit of less than $ 729,750 or 125% of the average home value in the metropolitan statistical area (MSA). The new Jumbo-Adjustment program adopted by Fannie Mae and Freddie Mac was effective from April 1, 2008 to December 31, 2010. The bill was signed into law by President Bush on February 13, 2008, but the new tariff is not respected by any lender (per 30 March 2015).
The general borrowing limit for 2017 increases and applies to loans sent to Fannie Mae by 2017 (even if originated before 1/1/2017). This is the first time the basic loan limit has increased since 2006. 2018 saw further increases.
Appropriate Loan Limit
Per Fannie Mae:
* Areas considered to be the High Cost Area are listed below:
References
Source of the article : Wikipedia
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