B2-1.4-01: Mortgage Loan Limits (03/31/2011)

© Fannie Mae Single Family Selling Guide

Mortgage Loan Limits Overview

Fannie Mae can only purchase loans up to a certain dollar amount. This dollar amount is known as the loan limit. Fannie Mae’s loan limits are imposed under its federal charter as amended by law.

The loan limits apply to all conventional mortgage loans delivered to Fannie Mae for whole loan purchase or MBS pool issuance and are based on the original loan amount of the loan (irrespective of the origination date). The limits are subject to change annually and vary, depending upon the number of units in the property, the property’s location, and whether the loan is a first or second mortgage. The Loan Limits for Conventional Mortgages are posted on Fannie Mae's website.

Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located at the time the loan is delivered to Fannie Mae.

First Mortgage Loan Limits

Fannie Mae’s first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits:

• The general limits apply to the majority of the mortgage loans that Fannie Mae purchases.

• The high-cost area loan limits apply to mortgage loans secured by properties in designated high-cost areas, as determined by Fannie Mae’s regulator. The high-cost area loan limits vary across the country.

In addition, Fannie Mae’s eligibility and delivery requirements may vary for high-balance mortgage loans. See High-Balance Loan Feature.

If the mortgage is a first mortgage securing an ownership interest in a co-op corporation, the amount of the first mortgage and prorated share of the co-op corporation blanket mortgage cannot exceed Fannie Mae’s loan limits.

Fannie Mae has no minimum original loan amount requirement for either whole loan mortgages or MBS mortgages.

Second Mortgage Loan Limits

Fannie Mae can purchase or securitize a second mortgage, provided the property is the borrower’s principal residence. Unlike first mortgage loan limits, Fannie Mae’s second mortgage loan limits are not dependent on the number of units in the property. The second mortgage loan limits apply whether or not Fannie Mae owns or has an interest in the first mortgage loan.

When a second mortgage is sold to Fannie Mae, the sum of the original loan amounts of the first and second mortgage loans may not exceed the applicable loan limit for first mortgage loans based on the location and number of units of the subject property. This combined loan limit requirement does not apply in cases in which Fannie Mae is acquiring a first mortgage that has a second (subordinate) mortgage that is not being acquired by Fannie Mae.

See B2-1.3-01, Fixed-Rate Mortgages, for additional information regarding second mortgages.

Loan Limits and Modified Mortgages

Loan limits for modified mortgage loans are based on the original loan amount of the mortgage loan and not on the unpaid principal balance of the mortgage loan at the time of modification or acquisition by Fannie Mae. A modified mortgage loan with an original loan amount exceeding the current loan limit is not eligible for purchase by Fannie Mae, even though the balance at the time of the modification may be at or below the current applicable loan limit.