Conforming Loan Rates For 2011…No Changes from 2010

Each year Fannie Mae comes out with limits on the size of loans that they are willing to buy. With real estate prices being down in most areas around the country including the Knoxville Area. Nothing has changed this year in the loan limits they have remained constant for the last 6 years.

Conforming mortgages is so named because, literally, they conform to the mortgage guidelines set forth by Fannie Mae and Freddie Mac.

Of the many traits of a conforming mortgage, one is “loan size” and loan sizes have limits. Mortgages exceeding this loan size limit cannot be securitized as a conforming mortgage and, therefore, are ineligible for conforming mortgage rates.

Conforming mortgage rates are often the cheapest source of mortgage money for residents of Tennessee , all things equal.

Each year, the government re-evaluates its maximum allowable loan size based on “typical” housing costs nationwide. Loans in excess of this amount are often called “jumbo”.

Between 1980 and 2006, as home prices increased, so did conforming loan limits — from $93,750 to $417,000.  Since 2006, however, home prices have retreated but the conforming loan limit has not.

In 2011, for the 6th consecutive year, $417,000 will be the country’s conforming mortgage loan limit.

Conforming loan limits vary by property type. The complete breakdown is as follows:

  • 1-unit properties : $417,000
  • 2-unit properties : $533,850
  • 3-unit properties : $645,300
  • 4-unit properties : $801,950

Despite the limits, some parts of the country get “loan limit exceptions”. In areas considered “high cost”, conforming loan limits range from $417,001 to $729,750. High-cost is defined by the median sales price of a region.

Los Angeles County, for example, is a high-cost region, along with a lot of California. There are less than 200 such areas nationwide, though.

We are very lucky in the Knoxville area as far as prices of housing. We have never experience large swings either up or down which has made our market very affordable. Right now is a great time to buy if you are thinking about buying a home. Prices are affordable along with low rates. If i can help you out give me a call at 865-696-9002 or email me at Rick@TheBigOrangePress.com