High Balance Conforming and Agency High Balance Loans
When the amount of a loan is anywhere from $417,000 to $625,500, these loans are usually known as a High Balance Conforming loan or an Agency High Balance loan. Many California counties attract a higher income demographic and because of this the housing cost may be higher significantly than average housing costs that are throughout the state.
The maximum conventional conforming high cost loan limits are as follows:
1 Unit: $625,500
2 Units: $800,775
3 Units: $967,950
4 Units: $1,202,925
Not all high cost Counties are near the coast, though most certainly are. It is not the location of the County, however, that causes maximum loan limits; instead it’s the median income of the County as a whole.
If the amount of your loan is greater than the maximum limit in the above table, then you definitely have a Jumbo loan that will require portfolio financing. A jumbo mortgage is a type of mortgage loan that is greater than the level of principal that is eligible for buying by the housing finance companies Freddie Mac and Fannie Mae. These loans are usually not offered in the secondary market and often are primarily serviced and held by the loan-making institution or in their private ‘portfolio’. Most of our borrowers need a Jumbo Mortgage, due to the high-cost areas and home prices in California.
Depending on the limit of the county, a lot of borrowers’ options are somewhat limited. We understand this type of specialized need and due to this we have partnered with a number of quality investors that really cater to this particular market.
Should I apply for a Portfolio or High Balance Jumbo loan?
If you discover a home that is good for your family and is also under the county’s loan limit, then you should absolutely consider pursuing a High Balance Conforming loan. Just keep in mind the following:
You still will need to supply your credit score as well as you debt-to-income ratio to qualify for this loan.
You must provide full income documentation.
With High Balance Conforming purchases, you might be required to offer up a slightly larger down payment on the home, but these numbers will be typically lower than if you opted for a Portfolio jumbo loan.
For any loan amounts that exceed the county limits you would benefit from discussing our Jumbo Portfolio options with one of our experienced loan specialists.