For the year 2006, Conforming loan limits look like this:

For conventional mortgages (those which may be purchased from local lenders by national organizations such as Fannie Mae and Freddie Mac), the loan limits for owner-occupied properties are:

* One-unit properties: $417,000

* Two-unit properties: $533,850

* Three-unit properties: $645,300

* Four-unit properties: $801,950

* For properties in Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the loan limits are 50 percent higher.

In the world of residential mortgages, these loan limits are very important. Loans with a loan amounts that exceed these limits are considered Nonconforming loans, and always carry higher interest rates. To avoid paying higher interests, homeowners in need of mortgages with non-conforming loan amounts should enlist the assistance of mortgage professionals to structure their financing to keep the loans within Conforming limits.

One way to structure a non-conforming loan amount of $500,000, for example, is to do a first conforming loan in the amount of $417,000 with a second loan in the amount of $83,000. That way, $417,000 will be financed at the most favorable interest rate available.

Borrowers who are presently paying Jumbo loan rates but now have their mortgage balances fall into the conforming limits may want to look into refinancing. A qualified mortgage professional can help you in determining if there is a benefit in refinancing.

One of the most popular loans used to stay within the conforming guidelines is the combination loan known as the 80/20 combo. You have an 80% first loan with a 20% second. There are variations such as the 80/10/10 where the buyers is putting down 10%. For instance if you have a purchase price of 500,000 - 80% of that would be 400,000 for the first mortgage and keep you within the guidelines of conforming loans.

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