New Mortgage Limits

On October 1, 2011, Fannie Mae and Freddie Mac will reduce the size of mortgages it purchases.  The new lower limit will be $625,500, down from the current $729,750.  For most of the United States, this should be no big deal.  However, in some pricey places, this change can really hurt borrowers.  Limits are set on a market by market basis, which in part is based on local housing prices.  The following table highlights certain markets that will be hit the most.



Current Limit

New Limit


San Diego, CA




Fairfield, CT




Los Angeles, CA




Washington, DC




Orange County, CA




Riverside-San Bernardino, CA












The following link provides new loan limits by county:

Mortgage bankers are working on obtaining new money to fund loans above conforming limits, or as they are more commonly known, “Jumbo Loans”.  Lenders are still willing to lend on these Jumbo Loans, provided the borrower has a high enough credit score and has enough cash to keep up with the mortgage payments.  The drawback for these Jumbo Loans is that they usually cost more, on average between 0.5 to 1 percent more.

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