Federal housing regulators on Wednesday said they are lowering the conforming loan limit for Jumbo loans – the maximum loan they will buy from lenders – by almost 17%.

The limit will drop to $625,500 from $729,750 in the priciest areas such as New York, California and Washington, D.C. Borrowers whose loans exceed the government maximum will need larger down payments or jumbo mortgages, which carry higher interest rates.

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