Finance
A conventional conforming loan in 2024 must be at or below the FHFA conforming loan limit to be eligible for purchase by:
AThe Federal Housing Administration
BThe Department of Veterans Affairs
CFannie Mae or Freddie Mac✓ Correct
DThe Oregon Department of Revenue
Explanation
Conforming loans meet the guidelines set by the Federal Housing Finance Agency (FHFA) and can be purchased by Fannie Mae or Freddie Mac on the secondary market. Loans exceeding the conforming limit are called jumbo loans and typically have 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.
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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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