In a county where the conforming loan limit is $766,550, a borrower obtains an $800,000 loan. Six months later, the conforming limit increases to $850,000 due to area median home price changes. The loan classification:
Correct Answer
B) Remains jumbo because classification is determined at origination
Loan classification (conforming vs. non-conforming/jumbo) is determined at the time of origination based on the limits in effect at that time. Subsequent changes to conforming loan limits do not retroactively change the loan's classification.
Why This Is the Correct Answer
Loan classification (conforming vs. non-conforming/jumbo) is determined at the time of origination based on the limits in effect at that time. Subsequent changes to conforming loan limits do not retroactively change the loan's classification.
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