New loan limits have been announced!
Last week, the Federal Housing Finance Agency (FHFA) announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021. In most of the U.S., the 2021 maximum conforming loan limit for one-unit properties will be $548,250, an increase from $510,400 in 2020. Read the announcement here. Next year, anything over $548,250 will be considered Jumbo (or non-conforming). As far as mortgage rates are concerned, the increase in conforming loan limits doesn’t have a direct impact, but generally, conventional conforming loans have the lowest effective rates.
Just today, the Federal Housing Administration (FHA) published its 2021 loan limits, an increase of 7.42 percent based on changes to the national median home prices. Therefore, FHA’s “floor” and “ceiling” loan limits will increase to $356,362 and $822,375, respectively, for a one-unit property. These new loan limits are effective for case numbers assigned on or after January 1, 2021, through December 31, 2021. Read FHA’s announcement here.
What does it all mean? Basically, home values have gone up and result, the baseline loan limit is increasing by the same amount. Increasing loan limits make it easier for more borrowers to buy homes with lower down payments at competitive rates and achieve the goal of homeownership.
Questions about loan limits or how to qualify? Call us or fill out the form below!