Fannie/Freddie Conforming Loan Limit to Remain Unchanged

The Fannie Mae/Freddie Mac conforming loan limit will remain at $417,000 in 2009, unchanged from 2008, according to the Federal Housing Finance Agency. The FHFA monthly purchase-only index declined by 5.9% over the 12 months ending in August. The two GSEs can purchase conventional mortgages with a loan amount of up to $417,000 anywhere in the country. In higher cost markets, the loan limit is based on a percentage of the area median price calculated by the Department of Housing and Urban Development. Starting January that limit will be set at 115% of the local median price and capped at $625,500. Currently, the Fannie/Freddie loan limit in high cost areas is based on 125% of the local median price with a cap of $729,750. The cap expires at yearend but some industry trade groups are urging Congress to extend it.