FHFA boosts the maximum conforming loan limit

Healthy market justifies higher benchmark for mortgages backed by Fannie, Freddie

On November 23rd, the Federal Housing Finance Agency (FHFA) announced that for the first time in a decade, the maximum conforming loan limit for single-unit home mortgages acquired by Fannie Mae and Freddie Mac will increase from $417,000 to $424,100* in 2017. The move is in response to record third-quarter median home prices, which pushed past previous highs recorded in June, 2006 and bested last year’s home values by 6.1%.

After the financial crisis of 2008, conforming loan limits for Fannie- and Freddie-backed mortgages were set by the Housing and Economic Recovery Act. (HERA). Among other policies, HERA mandated that the baseline loan limit could not go up until home prices returned to their former pre-decline levels. Until this year, average home prices in the U.S. had stayed under pre-decline levels, keeping the loan limit static.

The 1.7% loan limit increase will apply to most of the country’s housing markets, though in some high-cost areas, the new ceiling will be $636,150 for single-family homes, representing a 150% increase from the previous limit.


The FHFA’s announcement is a boon for borrowers and lenders alike, signifying an expansion of credit that creates more opportunities for people to become homeowners. Mortgages for amounts above the maximum loan limit—called “Jumbo” loans—are generally subject to more restrictions and tighter guidelines than their conforming counterparts, and are not backed by Freddie or Fannie.

* Not for properties in Alaska, Hawaii, Guam and US Virgin Islands. See chart for more details.
For more information and max county limits, visit www.fhfa.gov.


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