Is this for direct or guaranteed? There is no max square footage for either loan progam as far as I know. I have read multiple docs for these loans and never heard of such a thing. What handbook are you referring to?
I went Direct and the max sq. footage was 1800 for my area and that was firm according to my office. It does vary by location because it has to be considered modest for your area. Guaranteed, from my understanding, does not care about the square footage.
I think that it would be pretty hard to get them to approve that since its so much bigger then the limit, I know they can do waivers for slight differences but thats a pretty big difference.