Fannie Mae and Freddie Mac set annual conforming loan limits that determine which mortgages they'll back. When loans exceed that limit, banks carry the full risk themselves, which affects lending costs and availability.
Each year, Fannie and Freddie set the new conforming loan limit for the entire country. What? This means any loan amount within their limit. Fannie and Freddie will still jump in and make sure the banks and lenders are paid, even if the homeowner is unable to anything above that. The banks and lenders are on their own. Fannie, Freddie's not jumping in to help, so this creates a huge.
