After much talk of reducing the maximum Conventional Conforming and High Cost (Jumbo) County loan limits in California for 2014, FHFA announced the $417,000 loan limits will remain unchanged for Fannie Mae/Freddie Mac Conventional financing.
However, HUD REDUCED their FHA conforming loan limit for 2014 as announced in Mortgagee Letter 2013-43!
FHA has ‘floors’ and ‘ceiling’ max loan limits that are based on the national conforming loan limit, which is why the FHA loan limit varies by county.
Loan limits for the last 5 years have been directed by The Housing and Economic Recovery Act (HERA) and Economic Stimulus Act (ESA) of 2008 that temporarily increased the maximum Conventional and FHA conforming loan limits for mortgage loans acquired/secured by Fannie Mae/Freddie Mac Conventional financing loan programs or insured by FHA.
Mortgages eligible for purchase by Fannie Mae, Freddie Mac or insured by FHA are referred to as conforming loans because they ‘conform’ to their published loan limits and underwriting guidelines.
Good to Know ==> High Balance? Conforming Jumbo? Jumbo/Portfolio?
High Balance or Conforming Agency Jumbo loans are terms used to describe Conventional loan amounts in high cost counties between $417,000 to $729,500.
A true Jumbo portfolio loan is needed when a loan amount is higher than what the maximum FHA or conforming loan limit allows.
Why Would FHA Reduce their Maximum Loan Limit for 2014?
FHA doesn’t believe their role should be in helping ‘high end’ buyers finance homes. Carol Galante, the FHA Commissioner, has stated on numerous occasion they want to reduce FHA’s role (and exposure) in the U.S. mortgage market and encourage private capital to step in and fill that need.
Private capital would be the same entities (investment bankers) that created fraudulent stated income/no doc sub-prime and Alt-A loan loan products that brought our economy to it’s knees in 2008.
California 2014 Maximum Conforming & FHA Loan Limit by County
| County Name | FHA Loan Limit | Conventional Loan Limit |
|---|---|---|
| ALAMEDA | $625,500 | $625,500 |
| ALPINE | $463,450 | $463,450 |
| AMADOR | $332,350 | $417,000 |
| BUTTE | $293,250 | $417,000 |
| CALAVERAS | $373,750 | $417,000 |
| COLUSA | $397,500 | $417,000 |
| CONTRA COSTA | $625,500 | $625,500 |
| DEL NORTE | $311,250 | $417,000 |
| EL DORADO | $474,950 | $474,950 |
| FRESNO | $281,750 | $417,000 |
| GLENN | $287,500 | $417,000 |
| HUMBOLDT | $327,750 | $417,000 |
| IMPERIAL | $325,000 | $417,000 |
| INYO | $369,150 | $417,000 |
| KERN | $368,750 | $417,000 |
| KINGS | $325,000 | $417,000 |
| LAKE | $4011,250 | $417,000 |
| LASSEN | $285,500 | $417,000 |
| LOS ANGELES | $625,500 | $625,500 |
| MADERA | $425,000 | $417,000 |
| MARIN | $625,500 | $625,500 |
| MARIPOSA | $322,000 | $417,000 |
| MENDOCINO | $373,750 | $417,000 |
| MERCED | $472,500 | $417,000 |
| MODOC | $271,050 | $417,000 |
| MONO | $529,000 | $529,000 |
| MONTEREY | $483,000 | $483,000 |
| NAPA | $529,250 | $592,250 |
| NEVADA | $477,250 | $477,250 |
| ORANGE | $625,500 | $625,500 |
| PLACER | $474,950 | $474,950 |
| PLUMAS | $336,950 | $417,000 |
| RIVERSIDE | $355,350 | $417,000 |
| SACRAMENTO | $474,950 | $474,950 |
| SAN BENITO | $625,500 | $625,500 |
| SAN BERNARDINO | $355,350 | $417,000 |
| SAN DIEGO | $546,250 | $546,250 |
| SAN FRANCISCO | $625,500 | $625,500 |
| SAN JOAQUIN | $304,750 | $417,000 |
| SAN LUIS OBISPO | $561,200 | $561,200 |
| SAN MATEO | $625,500 | $625,500 |
| SANTA BARBARA | $625,500 | $603,750 |
| SANTA CLARA | $625,500 | $625,500 |
| SANTA CRUZ | $625,500 | $625,500 |
| SHASTA | $273,700 | $417,000 |
| SIERRA | $304,750 | $417,000 |
| SISKIYOU | $293,750 | $417,000 |
| SOLANO | $400,200 | $417,000 |
| SONOMA | $520,950 | $520,950 |
| STANISLAUS | $276,000 | $417,000 |
| SUTTER | $425,000 | $417,000 |
| TEHAMA | $312,500 | $417,000 |
| TRINITY | $271,050 | $417,000 |
| TULARE | $325,000 | $417,000 |
| TUOLUMNE | $331,200 | $417,000 |
| VENTURA | $598,000 | $598,000 |
| YOLO | $474,950 | $474,950 |
| YUBA | $425,000 | $417,000 |
Where Did FHA Loan Limits Fall the Most?
In California, we saw a significant decrease in FHA loan limits which can be viewed here on the Wall Street Journal.
Which Loan Should I Apply For – FHA or Conventional Financing?
The answer to that question is usually determined by 50 bazillion other variables. Contact me or call (951)-215-6119 so we can do a side by side comparison and which one meets your needs.
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