Income Guidelines

• Fannie Mae requires borrowers to prove they have a reasonable way to repay the mortgage. Fannie Mae encourages borrowers to use all of their income to qualify. Part of this encouragement includes not putting caps on income. If you earn $20,000,000 a year, you can still obtain a mortgage through Fannie Mae. That is as long as your total debts do not exceed the debt-to-income ratio requirements. If you earn a high amount of money, but also have significantly high existing debt agreements you may not qualify for a loan through Fannie Mae.
  
  

Loan Programs

• The most popular loan program through Fannie Mae is a 30-year fixed rate mortgage. This is not the only loan program offered, however. Loan terms as short as 10 years are available. Adjustable loans come in several different varieties. The standard Adjustable Rate Mortgage (ARM) has a lower-than-average initial interest rate that adjusts every 12 months. Hybrid-ARMS have longer initial fixed-rate terms of three, five, seven or 10 years. Once the initial fixed-rate period expires, the loan adjusts annually for the remaining term of the loan. Fannie Mae also offers balloon mortgages. A balloon mortgage amortizes over 30 years, but offers a lower interest rate than a 30-year fixed. The mortgage "balloons" after a set number of months and must be paid in full or refinanced at that time.
  
  

Conventional Loan Limits

• Fannie Mae and Freddie Mac work together each year to set the conventional loan limit. Any loan sold to Fannie Mae through the conventional loan program must be at or below the loan limit. As of 2011, the conventional loan limit is $417,000 for the 48 continental states. Loan amounts in Hawaii and Alaska are 150 percent of the standard loan limit. Some wealthy Americans with high incomes have mortgages that exceed this amount, and are not eligible for a conventional loan. This restriction is not based on income, but is based on the loan's balance.
  
  

High Cost Loan Limits

• Certain areas of the United States, such as San Francisco, New York and Seattle, require most people to obtain a loan that exceeds the conventional loan limit. When the mortgage business collapsed in the mid to late 2000s, Fannie Mae stepped in and began allowing loan amounts exceeding the conventional loan limits. The maximum loan amounts are determined on a county-by-county basis as needed for each community. Depending on what side of the county line your home is in, could determine if you can obtain a mortgage over $417,000 from Fannie Mae.