Great news for homeowners and homebuyers!
On November 27, 2018, the Federal Housing Finance Agency (FHFA) announced the increased 2019 maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac from $453,100 to $484,350.
These loan limits will also be increasing in what the FHFA calls “high-cost areas,” where 115% of the local median home value exceeds the baseline loan limit. Those limits will increase from $679,650 to $726,525.
The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act (HERA) of 2008, which establishes baseline loan limits. According to FHFA’s seasonally adjusted Home Price Index (HPI), house prices increased 6.9 percent, on average, between the third quarters of 2017 and 2018. Therefore, the baseline maximum conforming loan limit in 2019 will increase by the same percentage.
This is great news for homeowners and homebuyers as it’s a true economic indicator that the housing market continues to be robust. Additionally, conforming loans are ideal for many buyers as it allows for low down payments.
These increases take effect for loans closing on or after January 1, 2019.
The limits above are for one-unit properties. Two- to four-unit properties have also increased. Please contact an HFG Licensed Mortgage Professional at a location near you for information on those increases, or with any questions you may have. We look forward to working with you!