| The federal government is the major driver of the idea | | | | Note: One- to four- family mortgages in Alaska, Hawaii, |
| of home ownership. Hence, it has become the biggest | | | | Guam, and the U.S. Virgin Islands are 50 percent higher |
| player in the residential mortgage market. | | | | than the limits for the rest of the country. |
| Approximately one out five residential loans are either | | | | Second mortgages |
| guaranteed or insured or by a federal agency. These | | | | - $208,500 |
| types of loans are called government loans. The other | | | | - In Alaska, Hawaii, Guam, and the U.S. Virgin Islands: |
| 80 percent of residential mortgage loans are called | | | | $312,750 |
| conventional loans. | | | | Source: Fannie Mae |
| A Conventional mortgage must meet the underlying | | | | Freddie Mac and Fannie Mae buy conventional loans |
| funding terms and other limits of Freddie Mac and | | | | that meet their guidelines and limits in the secondary |
| Fannie Mae. For home properties in some states and | | | | mortgage market. The secondary mortgage market |
| U.S. territories such as Alaska, Hawaii, Guam, and the | | | | for conventional loans is very large and liquid. Majority |
| U.S. Virgin Islands, the conforming loan limits are 50 | | | | of the conventional mortgages are bundled into |
| percent higher. | | | | pass-through mortgage-backed securities, which trade |
| 2007 Single-Family Mortgage Loan Limits - Fannie Mae | | | | in a forward market known as the mortgage TBA (to |
| Single-Family Mortgage Loan limits effective January 1, | | | | be announced) market. |
| 2007: | | | | Due to the fact that a conventional loan is not given by |
| First mortgages | | | | the government, the lender obtains a lien or defeasible |
| - One-family loans: $417,000 | | | | legal title to the property in return mortgage payment. |
| - Two-family loans: $533,850 | | | | Once the mortgage has been paid in full, you receive |
| - Three-family loans: $645,300 | | | | the title to your home. This loan may be fixed rate or |
| - Four-family loans: $801,950 | | | | adjustable rate mortgage. |