At the end of November, the Federal Housing Finance Agency or FHFA announced that the baseline limits for Fannie Mae and Freddie Mac loans would increase in 2020. What does this mean, and how may it affect your mortgage? Investors Title will help break down this news.
Why Did the Loan Limit Increase?
Each year, the Housing and Economic Recovery Act (HERA) requires the adjustment of this baseline conforming loan limit as the average U.S. home price fluctuates. It was announced that the over the last four quarters, the average U.S. home value has increased an estimated 5.38 percent, so the baseline maximum conforming loan limit will follow suit.
How Are the Limits Impacted by Cost of Living?
In addition to the baseline limits outlined, there are different metrics in high-cost areas. This refers to areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit. In these cases, the maximum loan limit will be higher than the baseline loan limit.
You can view a more detailed map of what the conforming loan limits look like across the U.S. on FHFA’s site.
What Are the New Conventional Loan Limits?
The Fannie Mae and Freddie Mac loan limits look different depending on the type of property at hand:
- $510,400 for regular conventional loans (up from $484,350)
- $765,600 for one-unit properties with conventional high-balance loans (up from $510,400)
- $980,325 for two-unit properties with conventional high-balance loans
Seeking Advice from Investors Title
As loan limits are annually adjusted, it can be difficult to stay on top of changing trends. At Investors Title, we have decades of experience working with buyers, sellers, agents and lenders. Our St. Louis title company is here to help you make the most informed decisions possible.