For the first time in five years, the Federal Housing Finance Agency (FHFA) significantly increased the maximum conforming loan limits to $453,100 — up from 2017's maximum of $424,100. It's a change that just may help you reach your goal to buy a home.
The loan limit increases will help all buyers save money when getting a mortgage, especially those in high–cost areas, because a conforming mortgage generally has lower down payment requirements and offers a lower mortgage rate than a jumbo loan. Bottom line: you have more buying power in 2018.
And if you live in an area where a typical one–unit home costs more than the new loan limit, don't worry. Qualified borrowers who live high–cost areas can borrow more than $453,100. This map shows the 2018 maximum loan limits across the U.S., including the counties where the loan limit ranges are higher. In Boulder County, CO, for example, the limit is $578,450. In Snohomish County, WA, the limit is $667,000. Loan limits can be even higher in some areas.
House prices increased 6.8% on average between 2016 and 2017, according to FHFA. Raising the conforming loan limits helps keep housing affordable.
Freddie Mac and Fannie Mae can purchase single–family mortgages with loans up to the conforming loan limit. Loans above this limit are known as jumbo loans and generally have higher costs associated with them.
If you're in the market to buy a home, consider answering these five questions to determine if you're mortgage ready.