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15 priciest areas for home loans
By Tim Manni of HSH.com
Have you ever wondered what it would be like to live in one of the country's most exclusive, high-cost areas?
In most parts of the country, Fannie Mae and Freddie Mac have set the conforming-loan limit at $417,000, the maximum amount for loans they will back before borrowers must turn to jumbo loans. But there are several places nationwide called high-cost loan areas where that loan limit has been expanded to account for pricier real estate and a higher cost of living.
Here are 15 cities and counties with some of the highest loan limits and housing costs nationwide.
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15 priciest areas for home loans
1. Honolulu
Loan limit: $721,050
What makes it so expensive: Honolulu, the capital of Hawaii, is the most populous city in the state. It is home to the largest urban center and airport of all the islands. Its coastal location not only serves as a tourist hub but also as an integral trade route for large businesses in Hawaii and for countries in the surrounding Pacific. The National Association of Realtors lists the median home price in Honolulu at $629,700.
- Video: Hawaii travel guide
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- MSN Local Edition: Current Honolulu weather
15 priciest areas for home loans
2. Kauai County, Hawaii
Loan limit: $713,000
What makes it so expensive: The oldest geologically of the Hawaiian Islands, this "micropolitan" area is made up of four islands. One of the main reasons real estate is so expensive all over Hawaii is simple: There's only so much land to build on, so real estate is at a minimum. This classic relationship of supply and demand translates into land costs starting out much higher than in many other areas in the U.S.
- Video: Hawaii travel guide
- On our blog, 'Listed': Nearly half of under-40 borrowers are underwater
15 priciest areas for home loans
4. Maui County, Hawaii
Loan limit: $626,750
What makes it so expensive: The Hawaiian Islands are forced to import most of their goods, including building materials. With only so much land that can be developed and locally available materials, Fannie Mae and Freddie Mac have expanded the allowable loan limits across Hawaii to ensure they can still guarantee home loans in this expensive state.
- Video: Hawaii travel guide
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15 priciest areas for home loans
4. Los Angeles
Loan limit: $625,500
What makes it so expensive: The City of Angels is home to the world's largest and most successful film industry, drawing both wealthy celebrities and big businesses. Despite a median home price of $296,800, Los Angeles is the second-most-populous city in the country, leaving little room to build or expand. Add in the high cost of living, and Los Angeles is an expensive place to call home.
- Video: L.A. travel guide
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15 priciest areas for home loans
5. San Francisco
Loan limit: $625,500
What makes it so expensive: California has some of the most restrictive building codes in the country, leaving little space to build new homes. San Francisco has a median home price of $552,600, putting it in the upper echelon of U.S. home prices. There's a saying in California: Everyone wants to live here, but no one can afford to buy a home here.
- MSN Local Edition: What's going on in San Francisco this weekend?
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15 priciest areas for home loans
6. San Jose, Calif.
Loan limit: $625,500
What makes it so expensive: San Jose is the largest city in Silicon Valley, home to Adobe, Cisco, eBay and dozens of other technology-driven companies. Real-estate prices are the main driver of the high cost of living in San Jose — the highest in all of California and the U.S. The median home price in this technology hub is $660,000.
- Video: Avoiding mortgage rejection
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15 priciest areas for home loans
7. Santa Barbara, Calif.
Loan limit: $625,500
What makes it so expensive: Just saying the words "Santa Barbara" conjures up images of sunshine, expensive cars, celebrities and beachfront properties. The climate and scenery are so serene that Santa Barbara been nicknamed the "American Riviera." While the city is a year-round tourist destination filled with resorts for its visitors, its famous residents — surfing legend Kelly Slater and Oprah, to name two — set the bar on purchase prices quite high.
- On our blog, 'Listed': First-time homebuyers shut out in California
15 priciest areas for home loans
8. Santa Cruz, Calif.
Loan limit: $625,500
What makes it so expensive: Situated at the northern end of Monterey Bay and just about an hour south of San Francisco, Santa Cruz is home to one of the most famous surfing spots in the country. The high cost of living in California coupled with steep real-estate prices make Santa Cruz a difficult place to afford a home. Where the trailers typically start at $100,000 and modest three-bedroom homes go for about seven times that, it's no wonder that the conforming loan limit is $625,500.
15 priciest areas for home loans
9. Blaine County, Idaho
Loan limit: $625,000
What makes it so expensive: The cost of living in Blaine County, home of Sun Valley ski resort, is about double the state average. The latest data available from City-Data.com lists the median home price in the county at $516,336. Chances are, if you have a home in Blaine County, it's not your first home, it's a vacation home. Just to give you a sense of who your neighbors might be, John Kerry, Demi Moore and Clint Eastwood have homes there.
- On our blog, 'Listed': Why you can't get a mortgage
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15 priciest areas for home loans
10. Edwards, Colo.
Loan limit: $625,500
What makes it so expensive: Like Blaine County, Edwards, Colo., isn't where first-time buyers search for their starter home. If you're buying in Edwards — neighbor to Vail — chances are you're throwing down a few million for a ski chateau. As is the case with several of the rural locations on our list, Edwards is far from a population center, serving mainly as a destination for affluent vacationers.
- On our blog, 'Listed': Nearly half of under-40 borrowers are underwater
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15 priciest areas for home loans
11. Jackson, Wyo.
Loan limit: $625,500
What makes it so expensive: Take a look out your window. What do you see? If you're in Jackson, Wyo., chances are there are only blue skies and mountains as far as the eye can see. Maybe you'll see a coyote, but that's probably it. Part of what makes real estate so expensive in places such as Jackson and Blaine County is the amount of land that comes with a home purchase. You could be buying a ranch that comes on 10 to 50 acres of land. And contractors aren't wasting their time building condos or modest three-bedroom homes; these properties tend to be large and lavish, all in a rustic sort of way.
- Video: Avoiding mortgage rejection
- On our blog, 'Listed': First-time homebuyers shut out in California
15 priciest areas for home loans
12. Nantucket, Mass.
Loan limit: $625,500
What makes it so expensive: Nantucket — the word just sounds expensive. Originally a whaling center in the 18th century — and yes, Herman Melville was a resident — Nantucket has gone from modest fishing town to upscale vacation destination. Like the other islands on our list, Nantucket suffers from a problem it can't solve: There's only so much room to build. If you want to live here, you have to pay, and pay a lot. Famous residents who have called the island (second) home include John Kerry, Tommy Hilfiger, Chris Matthews and Mr. Rogers (so that's where Mr. Rogers' neighborhood is).
- On our blog, 'Listed': Could you afford to be neighbors with Bert and Ernie?
15 priciest areas for home loans
13. Dukes County, Mass.
Loan limit: $625,500
What makes it so expensive: The affluent vacation destination of Martha's Vineyard is what makes Dukes County famously expensive. Much like its sister island of Nantucket, "The Vineyard" is short on available land. Its beautiful beaches and small-town feel have attracted wealthy residents from the world over, as well as celebrities and political families such as the Kennedys. Dukes County isn't a place where you're going to buy your first home.
- On our blog, 'Listed': Why you can't get a mortgage
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15 priciest areas for home loans
14. New York City
Loan limit: $625,500
What makes it so expensive: What can you say about the "Big Apple" that hasn't already been said? New York is one of the cultural and financial capitals of the world. If you're famous and don't live in Los Angeles, chances are you live in New York. Politicians, investment bankers, movie stars and musicians don't mind the high cost of living. But getting away from the hustle and bustle of the big city isn't cheap, either. The surrounding suburbs in New York state and northern New Jersey have the same high loan limit.
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15 priciest areas for home loans
15. Washington, D.C.
Loan limit: $625,500
What makes it so expensive: Home to our nation's political leaders, D.C. is run by powerful, highly paid individuals. The median home price in the capital is $367,000, rather affordable in terms of the other cities and counties on our list. Think you'll escape the high home prices by renting instead? Think again. Rents in major cities such as New York and D.C. have risen appreciably within the past year or so as consumers have decided to give homeownership a rest for a while.
- MSN Local Edition: 10-day forecast for D.C.
- Video: Avoiding mortgage rejection
- On our blog, 'Listed': First-time homebuyers shut out in California
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