Nov
16

Conforming Loan Ceiling of $729,500 Extended

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Mortgage rates include co-ops

BUYERS of homes in high-priced markets [like New York City] have some reason to cheer: the federal government recently extended through 2010 the maximum dollar amount for “conforming loans.” This will probably mean better options for borrowers who might otherwise have had to take out “jumbo” mortgages.

Conforming loans meet all the guidelines of Fannie Mae and Freddie Mac, the government-controlled agencies that resell packages of loans to investors, and are therefore eligible for purchase by these agencies. Jumbo mortgages, issued in amounts above the government’s maximum, are nonconforming. Because lenders assume less risk in making conforming loans, the interest rates are usually lower.

As reported by Bob Tedeschi of the New York Times

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