Loan Limits Increase to $484,350

Given the rapid run-up in
home prices over the last year, it’s no surprise that loan limits will also be going up in
2019.  The Federal Housing Finance Agency
(FHFA) announced that the maximum conforming loan limits for mortgages eligible
for acquisition or guarantee by the two government sponsored enterprises (GSEs)
Freddie Mac and Fannie Mae will be $484,350.

The conforming loan limit as established by the
Housing and Economic Recovery Act (HERA) is reviewed each year and adjusted as
to reflect the change in the average U.S. home price.   The new limit represents a 6.9 percent
increase over the $453,100 limit for 2018, the percentage by which FHFA’s
Housing Price Index (HPI) for the third quarter of 2018 increased on an annual

The new limit is considered the baseline for
conforming loans, but HERA acknowledges that home prices can vary widely by
location so provides a formula for those areas with high home values.  These limits apply to areas in which 115
percent of the local median home price exceeds the baseline. Higher loan limits
will vary but cannot exceed the new ceiling limit of $726,520 which is 150
percent of the baseline amount.  A
ceiling of $726,525 applies to Alaska, Hawaii, Guam, and the U.S. Virgin
Islands.  FHFA says that the substantial increase in prices nationwide
means that most of the higher-priced areas will see increases in their loan

The above limits apply to one-unit
.  A list of limits for
two-to-four units properties and specific limits for all counties and
county-equivalent areas is here

The new limits are effective as of January 1,
2019. The Federal Housing Administration (FHA) and the VA are expected to adopt
the same loan limits for 2019.

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