Fannie Maeand Freddie Macannounced new conforming loan limits for next year would be increased to $417,000 from $359,650. The limit, determined by the Office of Federal Housing Enterprise, is based on average federal home price data.


With the new loan limit, Fannie Maeestimates an additional 466,326 homeowners will be eligible for a conforming loan next year while Freddie Mac estimates an added 500,000. Freddie Mac also estimates that total mortgage interest savings for a borrower with a typical 30-year, fixed-rate loan conforming to next year's limit is as much as $24,700 over the life of the loan.


The conforming loan limit adjustments are based on the October-to-October mean home price changes, as provided by the Federal Housing Finance Board's monthly survey of lenders, which includes both new and existing homes.


For multi-unit loans, next year's limits will be $533,850 (up from $460,400)for two-family homes, $645,300 (up from $556, 500)for three-family homes, and $801,950 (up from $691,600) forfour-family homes. For second mortgages, the 2006 limit will be $208,500. Meanwhile, the maximum amounts for one-to-four-family mortgages and second mortgages in Alaska, Hawaii, Guam and the U.S. Virgin Islands are 50% greater than for the rest of the U.S.


Most mortgages that Fannie Mae buys are well below the conforming limit. The GSE's average loan size for single-family properties in the first three quarters of this is roughly $172,000.

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