A borrower in San Francisco wants to purchase a single-family home for $1,200,000 with a 20% down payment. The 2024 conforming loan limit for high-cost areas is $1,149,825. What type of loan will this borrower need?
Correct Answer
B) A jumbo loan
The loan amount would be $960,000 ($1,200,000 - $240,000 down payment). Since this exceeds the conforming loan limit of $1,149,825 for high-cost areas, this would be considered a jumbo loan, which cannot be purchased by Fannie Mae or Freddie Mac.
Why This Is the Correct Answer
The loan amount would be $960,000 ($1,200,000 - $240,000 down payment). Since this exceeds the conforming loan limit of $1,149,825 for high-cost areas, this would be considered a jumbo loan, which cannot be purchased by Fannie Mae or Freddie Mac.
More Mortgage Knowledge Questions
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