Good news, homebuyers: Fannie Mae and Freddie Mac have raised limits on mortgages that qualify for their potential purchase. The new limit for a single-family home in Des Moines and most of the rest of the country is $726,200, up from $647,200.
While government-sponsored enterprises Fannie and Freddie don’t originate home loans, they end up buying most that traditional lenders make. But they’ll buy a mortgage of only so much value; by definition, these “conforming loans” conform to their standards.
Loans above their limit stay in the private marketplace. They’re called jumbo loans and have different underwriting criteria, pertaining to down payments or private mortgage insurance.
Limits for conforming loans rise as high as $1,089,300 in some areas of the country—real estate hot spots such as San Francisco, Boston or around ski areas in the Rockies. But there’s no need to fret over that here: The median sale price of a home in Des Moines was recently pegged at $185,000.
US Bank is quoting a conforming, or conventional, loan at 6.125% interest. A jumbo is slightly lower, at 5.625%.