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Conforming Limit Bumped

Conforming Limit BumpedOFHEO announces 2006 conforming maximum of $417,000

November 29, 2005


The government has announced the 2006 conforming mortgage loan limit.

The maximum conforming loan amount has been increased to $417,000, according to an announcement from the Office of Federal Housing Enterprise Oversight today.

OFHEO, which regulates secondary lenders Fannie Mae and Freddie Mac, said the increase applies to loans purchased by Fannie and Freddie effective Jan. 1, 2006. The adjustment is “based on the change in the national single-family house price as determined by the Federal Housing Finance Board from its Monthly Interest Rate Survey,” which has jumped to $306,759 from $264,540 last year.

Fannie estimates the higher limit, which is a 16% increase over the current $359,650 limit, will enable 466,326 more borrowers to qualify for some of the best mortgage rates. Freddie estimates 500,000 more borrowers will qualify under the new limit.

The second mortgage maximum was raised to $208,500, OFHEOs announcement said.

Limits on loans secured by conforming two-, three- and four-unit properties have been raised to $533,850, $645,300 and $801,950, respectively, the statement said.

In the high-cost areas of Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the limit will be 50% higher, or $625,500 for a single-family residence, according to OFHEO.

The conforming increase has a chain reaction — likely pushing the maximum FHA mortgage to $362,790 from its current $312,895 limit and leaving the VA maximum insurable amount headed for $104,250 (Ginnie Mae regularly raises the maximum VA loan amount so that it mirrors the conforming maximum).

Sam Garcia has been in mortgage lending since 1980, and is publisher of,, and


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Fannie, Freddie and FHLB news. Coverage of government sponsored enterprise regulation, operations and litigation.

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