Across most housing markets, loan limits for conforming loans acquired by Fannie Mae and Freddie Mac will increase from $548,250 to $647,200 in 2020, a $98,950 increase to account for changes in home prices. The conforming loan limit is set to rise 18.05 percent at the same rate as national home prices, according to The Washington Post.
FHA loans will likely rise as well, but new limits have not yet been announced. Higher limits for conforming mortgages and for FHA loans will eliminate the need for jumbo loans to buy property in a less affordable housing market.
The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, is required by the Housing and Economic Recovery Act to adjust the loan limits according to changes in home prices. The FHFA’s House Price Index showed that home prices increased an average of 18.05 percent between the third quarters of 2020 and 2021, so the conforming loan limit will increase by that same percentage.
The conforming loan limit will be higher in all but four counties in the United States in 2022.
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