Mortgage

Conforming loan limit remains at $417,000 for 2014

Likely to remain the same despite leadership changes

The Federal Housing Finance Agency announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for one-unit properties in most areas of the country.

“The expectation is that the change in leadership at the FHFA will result in more of the same. If Mel Watt were to be named, for example, he will likely focus on broad principal reductions in the short term,” an industry source said.

The Housing and Economic Recovery Act of 2008 establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions, in addition to requiring annual adjustments to the limits to reflect changes in the national average home price.

As HousingWire reported in October, when the FHFA was debating lowering the limit, Rick Floyd, executive vice president of the Real Estate Mortgage Network, said, "Anytime you lower the limit, you shrink the pool of potential buyers. The mortgage market is still, despite improvement, in a depressed state, especially if you compare it to where it was pre-bubble levels."

Meanwhile, the latest report from the Mortgage Bankers Association recorded that the average contract interest rate for a 30-year, fixed-rate mortgage with a conforming loan limit hit 4.46%. 

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