Definition of Fannie Mae:

Fannie Mae Loan Limits Orange County:

The Federal National Mortgage Association (FNMA), which is simply called Fannie Mae, is a private company and government-sponsored enterprise (GSE) that purchase loans from mortgage bankers, banks, credit unions and other lenders and then packages them together and sells them to outside investors in the secondary, “forward market” to insure that these same lenders have money on hand to continue funding new mortgage loans to borrowers. The ability for Fannie Mae to jump into this market is necessary to maintain the flexibility and liquidity of the entire U.S. mortgage market. Because Fannie Mae is willing to purchase both conforming and Jumbo loans from lenders, it allows lenders to loan money at rates that are 3 - 4% lower than what a home-buyer would otherwise pay to a private or hard money investor. The loans that Fannie Mae purchase are called conforming loans because the loans conform to Fannie Mae guidelines.

The primary limit on the loans that Fannie Mae supports is the loans' size. Beginning January 1, 2009, $417,000 in California most areas. The maximum loan amount for an Orange County single unit home is $625,500 and would be considered a Jumbo Loan, which means it is too big to conform to Fannie Mae conforming limits. High-Cost or Jumbo Mortgages in Orange County obviously come with higher interest rates and are an all around more expensive loan for the homeowner.

 

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