Finance
Iowa's conventional mortgage loan conforming limit is set by:
AThe Iowa Real Estate Commission
BFHFA (Federal Housing Finance Agency), which sets limits for Fannie Mae and Freddie Mac purchased loans✓ Correct
CIowa's Division of Banking
DThe Iowa Finance Authority annually
Explanation
The Federal Housing Finance Agency (FHFA) sets annual conforming loan limits for conventional mortgages eligible for purchase by Fannie Mae and Freddie Mac. Loans above these limits are 'jumbo' loans and typically carry stricter qualification requirements.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
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