If next year's conforming loan levels were in place today, only a couple dozen more home buyers in California's San Francisco Bay Area would benefit from the lower rates that come with conforming loans, compared to nonconforming or jumbo loans.

Throughout California some 4,100 additional home buyers will benefit next year from Fannie Mae and Freddie Mac raising the single-family conforming loan limit from $322,700 to $333,700, according to the California Association of Realtors.

Conforming loan interest rates are about 0.25 percent to as much as 0.50 percent cheaper than jumbo mortgage loan rates and that could save a typical California home buyer as much as $32,000 or more over the life of a 30-year mortgage, according to CAR and other sources.

"While this is good news for many home buyers, Fannie Mae's and Freddie Mac's new loan limits do not go far enough to improve home ownership opportunities in California, " said CAR President Ann Pettijohn.

The current median home price in California is $381,200, an increase of 17 percent compared to a year ago and more than 14 percent higher than the national conforming loan limit of $333,700. California has 14 counties with a median-home price above the national conforming loan limit.

The state's median price is more than twice the national figure, but some cities in San Francisco Bay Area counties have housing costs more than triple the national average of $172,400, according to the National Association of Realtors' data on October prices.

In Santa Clara County -- Silicon Valley -- the closed-sale median price of single-family homes was $569,000 in October, up $20,000 from $549,000 in October a year ago, according to the Bay Area Real Estate Market Newsletter, published by statistician Richard Calhoun, broker owner of Creekside Realty in San Jose.

"It's almost comical," said Robert Aldana, a real estate and mortgage consultant and publisher of LetsTalkRealEstate.com in San Jose.

"That $11,000 difference will be nonexistent as home prices go up, by the time the new conforming levels are in place next year. It doesn't do much for Silicon Valley," Aldana added.

Indeed, Santa Clara County home prices can jump $10,000 or more in a single month and have on several occasions this year -- a slow year, relatively speaking.

Under the current conforming loan limits, there were 141 single-family homes with prices eligible for cheaper conforming rates, and 5,941 that were not, according to a recent search of listings found on MLSListings.com, the online public access to the area's multiple listing service operated by R.E. InfoLink of Campbell, CA.

That includes only single-family homes listed in the counties of Santa Clara, San Mateo, Santa Cruz, Monterey, San Benito, San Francisco, Alameda and Contra Costa.

Only 25 more single family home listings -- 166 -- were found to be eligible for lower rates if next year's conforming loan levels were available today. Nearly 5,917 single-family homes were listed with prices higher than the 2004 conforming loan limits.

The comparison represents only moment in time. Over time changing inventories will add more conforming-loan-eligible homes. CAR estimates during 2004 some 1,100 buyers in the San Francisco Bay Area will ultimately benefit from the higher conforming loan limits.

"It does make it possible for some renters to become buyers. It can make about a half point difference on the interest rate depending on the loan program. We have this horrible restricted inventory right now, but in April, it will make more of a difference," said Mary Pope-Handy, a real estate agent with Intero Real Estate Services in Los Gatos.

"Anything that can help that first time home buyer get in does make a difference. It doesn't affect a whole lot of buyers, but that can be a condo in a decent neighborhood here," she added.

The new conforming loan limits will also help reduce costs for eligible loans in the refinance market where jumbos-turned-conforming come with payments reduced by both smaller balances and cheaper rates, says Robert McCarthy, a mortgage planner with American Family Funding in Campbell, CA.

"For the ones it does impact (having a first mortgage of $333,700 or less) with a loan amount of just $330,000 an 0.5 percent drop would save them $74 a month. Over five years that's $4,440," McCarthy said.

Fannie Mae and Freddie Mac adjust conforming loan limits annually. The conforming loan limits are based on the October-to-October changes in the mean (average) home price, as published by the Federal Housing Finance Board (FHFB). The FHFB figures come from its monthly survey of lenders. Both new and existing homes are included in the survey.

Most loans Fannie Mae purchases are well below the conforming limit, with the average purchased loan at about $150,000 in 2003.

Additional loans limits for 2004 are $427,150 for two-family-home loans; $516,300 for three-family-home-loans; and $641,650 for four-family-home loans. The maximum amounts for one-to-four-family mortgages in Alaska, Hawaii, Guam and the U.S. Virgin Islands are 50 percent higher than the limits for the rest of the country, because incomes and access makes these areas special high-cost regions.

To help more buyers and refinancing homeowners benefit from conforming loan levels, CAR is lobbying for the "Improving Homeownership Opportunities in High Cost States Act of 2003" (H.R. 3507), recently introduced by U.S. Representative Brad Sherman (D-San Fernando). The bill, if passed, would make parts of California and other high-cost regions eligible for a 50 percent increase in conforming loan levels.

Similar legislation has been a tough sell on Capital Hill during past legislative sessions.

"Conforming loan limits need to more accurately reflect the cost of housing in California, where the median price of a home is more than double that of the nation," Pettijohn added.