Borrowers Pay Lower Effective Interest Rates for Large Conventional Mortgage Loans

In response to a congressional request, GAO determined: (1) what proportion of conventional mortgage loans exceeded the statutory conforming loan limit of $108,300 in 1983; (2) how interest rates and fees paid by borrowers for conventional loans which exceeded the 1983 limit differed from those paid by borrowers for conventional conforming loans; and (3) what income a hypothetical borrower would need to qualify for the maximum conforming loan in various high-cost housing markets if the conforming limit were raised as proposed in H.R. 3420.