Conventional (Conforming) Loans:

Conforming loans are conventional loans that are a maximum of $417,000 and meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC) which also offer the REFI PLUS Program. Both of these stockholding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan limit.

Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market - effectively decreasing the demand for non-conforming loans.

Conforming mortgages are appropriately named, they "conform" to the mortgage underwriting guidelines of Fannie Mae or Freddie Mac. Mortgages that meet their criteria are later sold and securitized on Wall Street as mortgage-backed bonds. To implement the expansion to serve high-cost areas, Fannie Mae introduced the high-balance loan feature and broadly integrating high-balance loans into standard conforming business. Note: Jumbo-Conforming Mortgages, implemented under a temporary increase in conforming loan limits, must be closed by December 31, 2008.

First Mortgage Conforming Loan Limits

These amounts will apply to all conventional mortgages that are delivered to us for whole loan purchase or MBS pool issuance on or after January 1, 2009 – including conventional mortgages originated prior to that date, provided the original unpaid principal balance was equal to or less than the new maximum loan limits. The 2009 conforming loan limits are the same as the 2006, 2007, and 2008 conforming loan limits.

*Loan amounts > $417,000 are considered "Jumbo" loans. Below are the 2009 loan limits.

Units	Contiguous States, DC, and Puerto Rico		Alaska, Guam, Hawaii, and the U.S. Virgin Islands
	General	High-Cost*	General	High-Cost*
1	$417,000	$625,500	$625,500	$938,250
2	$533,850	$800,775	$800,775	$1,201,150
3	$645,300	$967,950	$967,950	$1,451,925
4	$801,950	$1,202,925	$1,202,925	$1,804,375

Government Loans HUD/FHA and VA