[ikka]

There is an upper limit on the size of the loan, so in more expensive areas the limit is less than what some houses are going for.

The taxpayer subsidy is I assume, the lower cost of borrowing due to Fan and Fred essentially being government-backed and thus very good credit risks.

[priceofreedom]

$359,650 is the current limit for conforming loans, anything above this would be considered a Jumbo Loan. In southern California where I live for instance the average house is near $500,000.