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As I mentioned in an earlier article, we recently undertook what turned out to be a failed attempt to refinance our home loan. In the process, we learned just what a confusing mess the mortgage industry is, including convoluted rules that include various loan limits set by Freddie and Fannie.

These are the government run entities that buy certain home loans, adding liquidity to the market. While these organizations keep money flowing back into the market for new loans, they do so under some strict and seemingly arbitrary loan requirements. If your loan won’t meet their standards, many banks either won’t approve the loan, or will approve it under very poor terms.

One of the requirements has to do with the size of loans Freddie and Fannie will buy. And due to recent legislation, these loan limits have become rather confusing. So to take some of the mystery out of conforming loan limits, I’ve put together several tables that should help folks understand these rules.

Property Type Maximum Base Conforming Loan Maximum Base Conforming Loan
High Cost Areas
1 unit $417,000 $625,500
2 units $533,850 $800,775
3 units $645,300 $967,950
4 units $801,950 $1,202,925

The 1 unit row applies to single family homes, townhouses, and condominiums–most of what we all buy. The high cost areas are for properties located in Alaska, Hawaii, Guam and the U.S. Virgin Islands.

But there is more to conforming loans. Congress increased these limits for certain high cost areas of the country. And to add to the confusion, Congress implement both permanent increases in the loan limits and temporary increases in loan limits. The American Recovery and Reinvestment Act of 2009 temporarily increases loan limits in certain areas of the country. Under the Act, the loan limits in designated high cost areas are the higher of the temporary limits established by the Economic Stimulus Act of 2008 and the permanent limits established by the Housing and Economic Recovery Act of 2008. I’m sure it took a lot of lawyers to think up this plan.

Loans that fall within these higher loan limits are called super conforming loans. To try to make sense of all this, here’s another table:

Property Type Maximum Base Conforming Loan Maximum Base Conforming Loan
High Cost Areas
Permanent Temporary Permanent Temporary
1 unit $625,500 $729,750 $938,250 $1,094,625
2 units $800,775 $934,200 $1,201,150 $1,401,350
3 units $967,950 $1,129,250 $1,451,925 $1,693,900
4 units $1,202,925 $1,403,400 $1,804,375 $2,105,100

You can find even more information about conforming loan limits and other loan requirements at Freddie Mac.

[Check out today’s mortgage rates.]

Author Bio

Total Articles: 1118
Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Article comments


It all seems very confusing to me, and I just refinanced a loan! 🙂 Good luck and I hope you can get a better rate when you have more equity in the home.

John Tatum says:

I was in process of a refi w/lender who just last week relayed to me that because I didn’t have my house off the market for 6 months at least, then the lender was restrained by Fannie Mae to forego including a HELOC, which I was attempting to merge with my lst TD and re fi both; so then the fed agency injected the 6 mo. req’t into the mill refusing to refi both; When I made application to lender, both were o.k.; withdrew my house from mkt. and all was proceeding perfectly until the FED action was imposed; thereby allowing the lst TD to be done, but not the HELOC??? Any response? Had a 4.25 rate vs. existing 5.85% previously….Thanks

DR says:

John, as a real estate investor, I’ve run into a similar problem. In fact, I’ve seen it where you can refi at all if your home has been on the market in the past 12 months. However, I’ve never heard it affect a HELOC before.