Arkansas Loan Limits

Conforming mortgages are appropriately named; they "conform" to the mortgage underwriting guidelines of Fannie Mae or Freddie Mac. Mortgages that meet these criteria are later sold and securitized on Wall Street as mortgage-backed bonds.

But no matter how strong a mortgage applicant's profile may be, conforming loans are still limited by dollar size. The 2009 conforming loan limits, as released by the government, are:

1-unit properties : $417,000
2-unit properties : $533,850
3-unit properties : $645,300
4-unit properties : $801,950

However, maximum conforming loan limits don't apply to all housing markets equally.

Areas designated by the government as "high-cost" get the benefit of higher loan size limits based on typical home prices throughout the region. A condo in Los Angeles, for example, is conforming up to $625,500. By comparison, a home in Little Rock, Arkansas is capped at $417,000.

There are 59 designated high-cost areas in the U.S., most of which are in California. For everyone else, the 2009 conforming loan limit is $417,000. Loans in excess of the 2009 conforming loan limits are commonly called "jumbo", or "super jumbo", depending on their size.

"Conforming" is a Fannie Mae convention so if your loan is not destined for sale and securitization on Wall Street, the loan limits don't apply to you. This is why we keep hammering home the point -- if you've got a jumbo or super-jumbo home loan in the works, think local instead. Local banks and lenders like The Mortgage Bank of Arkansas are often better equipped to handle these loans. The fees are less and the rates are better.