Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae and Freddie Mac. Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.
|Conforming Loan Limits|
|# of Units||Maximum original principal balance||Alaska, Guam, Hawaii, and U.S. Virgin Islands only|
FHA mortgage loans are issued by federally qualified lenders and insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.FHA loans are an attractive option, especially for first-time homeowners:
- Generally easier to qualify for than conventional loans.
- Lower down payment requirements.
- Cannot exceed statutory loan limits.
A mortgage with a loan amount exceeding the conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO), and therefore, not eligible to be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. OFHEO sets the conforming loan limit size on an annual basis.
Jumbo loans are often securitized by institutions other than Fannie Mae or Freddie Mac. These securities carry more credit risk than those issued by Fannie Mae or Freddie Mac, and therefore, trade at a yield premium which translates into slightly higher interest rates. However, in recent years the spread in interest rates between jumbo and conventional mortgages has been reduced.
As a full service brokerage, we are able to provide funding avenues for a wide variety of commercial scenarios as well as underwrite loans for small and large apartment complexes, Churches, Vineyards, professional, and industrial space and other scenarios. Borrowers can be one or more individuals, Corporation, Limited Liability Company, General or Limited Partnership, Joint Venture, or a Trust.
Areas of Speciality
• Self-Employed Borrowers
• First-Time Home Buyers
• Business Owners
Areas of Coverage
• South Placer County Focused
• Greater Sacramento Area
• San Francisco/Bay Area