Higher Loan Limits for Fannie Mae & Freddie Mac Areas Designated "High Cost"

Homes in these areas can get higher loans due to the cost of real estate.

The vast majority of home mortgages are eventually backed by Fannie Mae and Freddie Mac. This allows more liquidity and helps lenders to feel secure in granting mortgages that will later be guaranteed by these entities. There is a moving upper loan limit set by Fannie Mae and Freddie Mac for maximum mortgage amount they will allow.

However, the maximum loan amount is raised for areas of the country designated as "high cost areas." The amounts allowed in these areas vary. Thirty areas, mostly urban areas in states, as well as Guam and Puerto Rico are on this list.

Some of these areas have higher loan limits approaching $800k in the 2009 list, and you can tell that housing must be quite expensive in these localities. The good news is that loans can be had with the backing of Fannie Mae and Freddie Mac for homes in these high cost areas.