FHFA Increases Conforming Loan Limits

  • November 29, 2017

Last week, the Federal Housing Finance Agency (FHFA) increased the maximum conforming loan limits for the second year in a row.  This is only the second time since 2006 the FHFA has increased the maximum conforming loan limit.  In 2018, the limit will increase from $424,100 to $453,100 for most states, and from $453,100 to $679,650 in high-cost areas including Alaska, Hawaii, Guam, and the US Virgin Islands.  

Conforming loan limits for loans backed by Fannie Mae and Freddie Mac were established as part of the Housing and Economic Recovery Act (HERA) of 2008.  During economic recovery, loan limits remained at a level of $417,000 for a decade.  In 2017, limits were raised for the first time.  The conforming loan limits are based on changes in home price appreciation. According to the FHFA house price index, the average home price increased 6.8% from 2016 to 2017 in most states and 150% in high-cost areas including Alaska, Hawaii, Guam, and the US Virgin Islands. 

The housing industry has faced rapid home price appreciation for much of last year due to limited available inventory.  With fewer homes for sale, and construction not meeting the demand, a steady flow of buyers is competing over the same properties.   The recent increase in loan limits will improve access to borrowers buying higher-priced properties. 

 

Sources: FHFA, HousingWire, Mortgage News Daily

Latest Tweets

© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).