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2012 Loan Limits: Conventional, FHA and VA

Mortgage Loan Limits: Know Your Boundaries

Mortgage Loan Limits: Know Your Boundaries

Every year, mortgage loan limits are reviewed and revised for each county. The conventional loan limits for 2012 remained the same as 2011 except in Washington D.C. Each lending agency determines their own limits but they work off similar data. FHA, VA, Fannie Mae and Freddie Mac use the median sales price for each county to determine loan limits. There are national limits established creating a mortgage floor and ceiling. Each county’s median sales price is multiplied by 115%. If that amount falls between the floor and ceiling then the county is considered a high-cost area.

Conforming loans meet or “conform to” Fannie Mae and Freddie Mac rules. The general conforming loan limit for Orange County, CA is $417,000. Beginning in 2008, Fannie Mae and Freddie Mac added high balance loan limits for high cost areas. These loans create an intermediate range between conforming and jumbo loans. However, as mentioend above, high balance loan limits vary by county. You can review the complete list of county limits by clicking “2012 Conforming Loan Limits by Area”.

One Size Does Not Fit All. Great Limits for More Units

Loan limits increase based on the number of residential units. What’s considered “1-unit” property? It’s just as it sounds. It’s one complete dwelling. Multiple units, like duplexes, triplexes and quads have multiple connected, yet individual living quarters. The loan limits for multiple units are based off the single unit limit. There’s a 28.02% bump to the loan limit for a 2 unit property, 54.75% increase for a 3 unit property and 92.31% adjustment to a 4 unit property.

These loan limits only apply to residential properties. Single-family residences, townhomes, condominiums, manufactured homes and planned unit developments are all residential properties.Residential loans are 1-4 units. 5+ units are considered commercial loans. Neither Fannie Mae, Freddie Mac, HUD nor VA offer commercial loans.

Broader Range of Limits for FHA

FHA and VA loan limits follow a similar pattern. Each county is evaluated annually along the same lines. However, FHA’s base loan amount does not necessarily start at $417,000. In some areas the floor is less than $417,000 but the ceiling in high cost areas is much greater too. Click here for a complete list of county loan limits.

Boost VA and Conforming Loan Limits

At the time of this post, VA loan limits remain at $621,000 for a single unit in Orange County, CA. In 2011 the VA limit maxed out at $700,000 here. The decrease was significant. However, this does not prevent you from getting more. If you’re looking  to obtain a VA loan larger than $621,000 read this.

Despite the decrease in VA loan limits, FHA and conventional limits remained the same. In fact, since 1999 loan limits have risen 3-fold in Orange County, CA. In 1999 the conforming loan limit was $240,000. Today the maximum high balance limit is $729,750 for FHA loans and $625,500 for conventional loans. Still not enough to meet your home financing needs? Learn how to raise loan conventional limit up to $850,000 here.  

Click here to contact me with your questions or for a quote on your scenario.

Scott Storace

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