Loan limits refer to the maximum amount of money that can be borrowed utilizing an Asset Depletion mortgage loan. These limits are set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, which purchase and guarantee these loans in the secondary mortgage market.

• Loan limits exist to regulate the maximum amount of money that can be borrowed through certain loan programs, particularly government-backed mortgage programs such as those offered by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac. These limits vary from county to county and are determined by several factors.

• Loan limits are primarily influenced by the local housing market conditions. Real estate prices can vary significantly from one region to another, and county loan limits help adjust the loan amounts to reflect the cost of housing in a particular area. Higher-cost areas typically have higher loan limits to accommodate the higher home prices.

• Loan limits also play a role in promoting affordable housing options. By setting maximum loan amounts, lenders are encouraged to provide loans within a reasonable range, which can help ensure that housing remains affordable and accessible to a wider range of individuals and families.

• Lenders and government agencies consider loan limits as a risk management tool. By setting a maximum loan amount, they can mitigate the potential risk of default or financial instability in case borrowers are unable to repay the loans. Loan limits are designed to strike a balance between enabling homeownership opportunities and minimizing the risk to lenders and the broader economy.

• Conventional loans will be determined to be either conforming or high balance.

• The current conforming loan limit for all counties throughout the country is $726,500 for a one unit property.

• For homes that are located in what has been determined to be a high balance region, the loan limits will vary depending upon the county.

• In regions where high balance limits don’t apply, any loan amount over $726,200 will be considered a Jumbo Loan. In a county which is considered to be a high balance region, a Jumbo Loan will then be any loan size above the high balance limit.

It is always best to be acquainted with the County Limit of the area in which you are interested in purchasing your new home.