Interest Rate Differentials Between, Jumbo and Conforming Mortgages, 1995-2000
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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This Congressional Budget Office CBO paper estimates the difference between interest rates on two types of mortgage loans conforming loans, which are for amounts of 275,000 or less, most of which are ultimately purchased by one of the three government-sponsored enterprises GSEs that deal with housing finance Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and jumbo loans, which are larger than 275,000 and may not be purchased by the GSEs. The degree to which interest rates on conforming loans are lower than rates on jumbo loans serves as a rough measure of the benefits that the housing GSEs pass on to borrowers in the mortgage market. This paper explains in more detail some of the estimates contained in CBOs new study Federal Subsidies and the Housing GSEs, prepared at the request of the Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises of the House Committee on Financial Services.
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