The residential conforming loan limit for 2005 has been raised to $359,650, according to the Office of Federal Housing Enterprise Oversight, or OFHEO. The agency, which currently regulates secondary mortgage giants Fannie Mae and Freddie Mac, announced the higher limits today.

The new limit, which represents the maximum loan amount that can be purchased by Fannie and Freddie, is based on changes in the Federal Housing Finance Board’s national single family house price from its Monthly Interest Rate Survey, OFHEO said.

For two-unit properties, the new limit is $460,400, while three- and four-unit properties will see their limits rise to $556,500 and $691,600, respectively.

In “statutorily designated high-cost areas,” including Alaska, Guam, Hawaii and the U.S. Virgin Islands, the limit will increase to $539,475.

The limit on conforming second mortgages will rise to $179,825 in non-high-cost areas, while seconds in high cost areas will be limited to $269,725.

The conforming limit was raised last year to $333,700.

The FHA insurable loan limit, which by law is tied to the conforming loan limits set by Fannie and Freddie, can be expected to increase from its current maximum of $290,319 in high-cost areas to approximately $313,000 next year.

The maximum VA loan guaranty, which is also tied to the conforming loan limit and was recently raised to $83,425 with a maximum loan amount of $333,700, can be expected to rise to nearly $90,000.

In an announcement issued by Freddie, the government sponsored housing enterprise said the increased single family limit “makes it possible for an estimated 340,000 additional families to obtain lower cost mortgage financing.”

Sam Garcia has been in mortgage lending since 1980, and is publisher of MortgageDaily.com and MortgageChronicle.com.

email: SamGarcia@MortgageDaily.com