The Federal Housing Finance Agency announced that it will raise limits on loans to keep pace with changes in home prices. With this move, financial giants Fannie Mae and Freddie Mac will let borrowers take out loans over $500,000 in 2020. But raising the loan ceiling may spell trouble as companies take on potentially risky loans, and this does little to alleviate the heart of the current housing market problems: a lack of affordability.
Fannie Mae and Freddie Mac will let mortgage borrowers nationwide take out home loans over $500,000 in 2020.
The Federal Housing Finance Agency announced Tuesday that it will increase the limit on conforming loans, meaning mortgages that adhere to the standards imposed by Fannie Mae FNMA, -1.44% and Freddie Mac FMCC, -1.58%, to a maximum of $510,400 nationwide. In high-cost areas, the maximum loan limit for mortgages acquired by Fannie Mae and Freddie Mac will be $765,600.
On a local level, the loan limits were set higher in all but 43 counties across the country, the FHFA reported. The FHFA published a full list of the loan limits for each county nationwide for borrowers to reference.