Updated Conforming Loan Limits

Tuesday, as it does every year, Fannie Mae raised the limit on single family conforming loans to $359,650 for 2005. This is an increase of almost eight percent from the 2004 limit of 333,700.

Conforming loans are those that Fannie Mae will purchase from originators and limits are based on yearly changes (October to October) in the average home price as announced by the Federal Housing Finance Board.


Eligibility for a conforming as opposed to what is commonly called a 'jumbo' loan can save a borrower a substantial amount of money over the life of a loan. While figures vary regionally, a conforming loan is generally priced in the vicinity of 25 basis points less than the jumbo variety. Fannie Mae estimates that an additional 271,500 home owners will be eligible for conforming loans under the new guidelines.

Conforming loan limits for multi-family loans were also increased. Limits for two-family homes went from $427,150 to $460,400; three-family dwellings increased from $516,300 to 556,500, and four family loans went from $641,650 to 691,600. The new second mortgage loan limit is now $179,825.

Hawaii, Alaska, Guam and the U.S. Virgin Islands enjoy conforming limits that are 50% higher across the board than those limits on the mainland.