Finance
What is the conforming loan limit's primary purpose?
ATo limit borrowing by investors
BTo define the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac✓ Correct
CTo set the maximum FHA loan amount
DTo cap VA loan guarantees
Explanation
The conforming loan limit defines the maximum loan amount that Fannie Mae and Freddie Mac can purchase from lenders. Loans exceeding this limit are 'jumbo loans' and typically carry higher rates and stricter qualification requirements.
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