What is the difference between a conforming and non-conforming (or jumbo) loan?
Effective February 13, 2008 and until December 31, 2008 the difference between a conforming and non-conforming (or jumbo) loan is now defined as follows: as part of the federal government’s 2008 economic stimulus plan, the conforming loan limit which was previously capped at $417,000 for a single family home has now been temporarily increased to 125% of a metropolitan area or region’s median home price as defined by HUD*. The maximum allowable loan limit is $729,750 for homes at the highest end of the median price spectrum and at the lowest end not less than $417,000. This temporary increase applies to both purchase and refinance loans. Therefore any loan amount which exceeds 125% of a region’s median home price would be classified as a non-conforming (or jumbo) loan. Please refer to the Department of Housing and Urban Development* (HUD) website for more information on the median home price in your region or area: http://www.hud.gov/ Fannie Mae & Jumbo Mortgage Rates Just One Click!
