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In 2017, when determining which threshold to compare the APOR to the APR for closed end consumer credit transactions secured by the principal dwelling, does the increase to $424,100 for the 2.5% threshold apply to loans over $424,100 regardless of property location? Or if the property location is in for example, the Nashville MSA where the 1 unit dwelling maximum was defined by FHFA as $466,900 for Davidson County would that $466,900 amount apply instead?
Basically, is the $424,100 applicable to all loan locations, or do we adjust by loan location based on the variations published by FHFA by county?
The jumbo loan threshold will be based on the conforming loan limit in effect for the area where the property is located. In most of the country this will increase from $417,000 to $424,100 on Jan. 1, 2017. However, in certain high-cost areas the jumbo loan threshold will be higher.
Comment 1026.35(a)(1)-3 states:
“Threshold for “jumbo” loans. Section 1026.35(a)(1)(ii) provides a separate threshold for determining whether a transaction is a higher-priced mortgage loan subject to § 1026.35 when the principal balance exceeds the limit in effect as of the date the transaction’s rate is set for the maximum principal obligation eligible for purchase by Freddie Mac (a “jumbo” loan). The Federal Housing Finance Agency (FHFA) establishes and adjusts the maximum principal obligation pursuant to rules under 12 U.S.C. 1454(a)(2) and other provisions of Federal law. Adjustments to the maximum principal obligation made by FHFA apply in determining whether a mortgage loan is a “jumbo” loan to which the separate coverage threshold in § 1026.35(a)(1)(ii) applies.”
The FHFA has information on the conforming loan limits here: https://www.fhfa.gov/DataTools/Downloads/pages/conforming-loan-limits.aspx.
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