Home Loan Limits Increase for 2017

After ten years, the Federal Home Finance Agency (FHFA) will increase its conforming home loan limits for 2017, increasing home buyers financing power.  The conforming limit has not budged since it was raised to $417,000 in 2006, just prior to the financial crisis.

Discover how much home you qualify for, click here.

Conforming home loan limits, which apply to all conventional mortgages delivered to Fannie Mae and Freddie Mac, are set each year by FHFA.  Fannie Mae and Freddie Mac are restricted to purchasing mortgages with loan balances at or below the conforming limit set each year.

According to the 3rd quarter House Price Index report,  home prices are now, finally, above the 3rd quarter home prices of 2007.  After 10 years, home prices have returned to their pre-decline level prompting FHFA to increase the baseline conforming limits.

Conventional and VA Home Loans

The conforming loan limits apply to both conventional financing as well as Veteran home loans (VA Loans).

The 2017 conforming loan limits will increase to $424,100 on January 1, 2017 for single family residences.  Two to four family unit limits are also increasing.

Home Loan Limits 2017

Loans that exceed the established conforming loan amount are commonly referred to as Jumbo loans.  Jumbo loans are typically not backed by Fannie Mae or Freddie Mac, and the eligibility requirements and guidelines are stricter.

Find out how much  home you can afford, click here.

High-Cost Areas

In 2009, loan limits were raised in certain areas where the median home price exceeded the national area.  These are referred to as high-cost areas. There are 234 high-cost areas nationwide which include New York City, Los Angeles, San Francisco, Alaska and Hawaii.

Since the baseline conforming limits will be higher in 2017, the high-cost loan limts are increasing as well to $636,150, which is 150% of $424,100 for one-unit properties.

What does this mean for you?  You can finance a higher priced home without falling into the Jumbo category which carries tougher guidelines.

Find out how much home you can afford, click here.

 

About Elizabeth Rose

Elizabeth has over 30 years in the financial and mortgage industry. In tune with the mortgage market, she provides refreshing, unrivaled knowledge leveraging expert resources and delivering results.
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