________ are non-conforming loans because they exceed the FNMA loan limit of $____________.

________ are non-conforming loans because they exceed the FNMA loan limit of $____________.

• A. Jumbo loans
• B. Conventional loans
• C. FHA loans
• D. VA loans

Answer: (A)

Loans that exceed the conforming loan limit are non-conforming, and the best-known example is jumbo loans. These loans can’t be purchased by Fannie Mae or Freddie Mac, so they stay on the lender’s books or are sold as private-label securitizations. Because they carry more risk, underwriting tends to be stricter, with larger down payments and often higher interest rates. The exact conforming limit changes yearly and by location, so the blank would be filled with the current limit for a single-family home in that year and area (commonly around $726,200 in many parts of the country, higher in expensive markets).

Loans that exceed the conforming loan limit are non-conforming, and the best-known example is jumbo loans. These loans can’t be purchased by Fannie Mae or Freddie Mac, so they stay on the lender’s books or are sold as private-label securitizations. Because they carry more risk, underwriting tends to be stricter, with larger down payments and often higher interest rates. The exact conforming limit changes yearly and by location, so the blank would be filled with the current limit for a single-family home in that year and area (commonly around $726,200 in many parts of the country, higher in expensive markets).