A compliance analyst reviews whether the file is conforming or jumbo after a loan-amount change. Which conclusion should guide pricing?

Correct Answer

A) Use the FHFA conforming loan limit for the property and year

Why this is correct: The governing principle is that loan pricing and eligibility for sale to Fannie Mae or Freddie Mac depend on whether the loan amount is at or below the conforming loan limit set annually by the Federal Housing Finance Agency (FHFA). This limit varies by county and property type (e.g., one-unit vs. multi-unit). To determine if a loan is conforming or jumbo after a loan amount change, the analyst must compare the new amount against the applicable FHFA limit for that property location and year. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because it ignores the need to verify the specific loan amount against the official limit. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because borrower preference cannot override binding loan limits that affect pricing and salability. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because conforming limits are specific to conventional loans eligible for GSE purchase; other products like FHA or VA have different guidelines. Exam tip: For any question about conforming status, your first step is to check the current FHFA loan limits for the specific county. This is a fundamental pricing and underwriting factor.