Agency Jumbo Mortgages
Congress temporarily raised the conforming loan limit (the limit at which a jumbo loan is required) to 125% of each county's median home price or $625,500, whichever is less. For most counties, the limit will stay at $417,000 because 125% of the median home price is less than $417,000. The expanded loan limits affects 244 counties in 28 states.
This gives us essentially three layers of loan sizes now as follows:
- Conforming loans - considered "conventional," this is your typical mortgage which still includes any loan under $417,000.
- Jumbo loans - here is where the line gets fuzzy. In the counties where the median home price is below $417,000, any loan over $417,000 is still considered jumbo. For areas that are designated "high-cost," jumbo now refers to loans over $729,750.
- New jumbos (also known as conforming jumbos, jumbo lights or agency jumbos) - this tier is contained to the high-cost areas where the median home price is over the conforming limit. These new loans will cater to those counties and can be used for loan amounts between the conforming limit ($417,000) and the new nationwide max, $729,750
While the guidelines may be a little tough for the average consumer to digest, the savings for those who qualify for the new jumbos is very real and very attractive. The new jumbos can shave off up to 1% in interest rate when compared to the former jumbo rates!
For detailed (county-by-county) information, www.FHA.gov has a clickable map of the United States to find out if the new loan limits affect you.
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