Mortgage Daily Logo
mortgage news from industry experts

2004 Conforming Loan Limits Set

2004 Conforming Loan Limits SetFannie and Freddie announce new conforming limit of $333,700

December 2, 2003

By COCO SALAZAR

Freddie Mac and Fannie Mae announced they will be eligible to finance larger-sized home loans in 2004.

Starting Jan. 1, the conventional loan limit for single-family properties will increase by 3.4%, according to the government-sponsored enterprises (GSEs). The current conforming loan limit of $322,700 will be raised to $333,700.

The mortgage giants determine conventional loan limits annually, basing the amounts on the changes that occur from October to October on average home purchase prices. The 2003, or current, loan limit was based on a 7.3% increase on average home prices.

Mortgages that exceed the maximum loan amount fall into the jumbo loan category, which carry higher interest rates. With the new loan limits, Fannie Mae estimated about 95,000 more homebuyers can be eligible for a conforming loan, which can result in savings of $21,900 over the life of a 30-year mortgage.

According to Freddie Mac, the new single-family mortgage loan limit will allow 150,000 additional families to obtain lower cost mortgage financing and can save borrowers as much as $38,700 over the life span of a 30-year loan.

The 3.4% increase applies to multifamily unit loans as well, said the GSEs.

Conforming loan limits for two-family properties will rise to $427,150; three-family property mortgages will increase to $516,300; and four-family unit loans will go up to $641,650.

The loan limit on second mortgages will increase from the current $161,350 to $166,850, reported Fannie.

The D.C.-area companies also pointed out that the maximum loan amounts for one-to-four family units in Alaska, Hawaii, Guam and the U.S. Virgin Islands are 50% higher than those set for the rest of the country ($500,550). Additionally, the second-mortgage loan limit in these areas will be $250,275.

By law, Federal Housing Administration loan limits are tied to conforming loan limits, which means the 3.4% increase might apply to federally insured mortgages as well. If the administration follows this track, the maximum amount it finances for a home in a high cost area could change from $280,749 to $290,294. In low cost areas, the current loan maximum of $154,896 could increase to $160,162. The FHA usually reports new loan limits in January.


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.

email: s3celeste@aol.com

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION