Last Tuesday, the Federal Housing Finance Agency (FHFA) announced that conforming loan limits will increase from $510,400 to $548,250 in 2021 marking the fifth straight year of loan limit increases. Most counties in California will now have high balance limits as well, these can be as high as $822,375.
For context, a conforming loan is a type of mortgage that is offered by a private lender and backed by a government-sponsored entity (GSE) like Fannie Mae or Freddie Mac. When average home prices increase, the limits on conforming loans are required by law to follow suit.
Maximum Loan Amount for 2021
|Units||Contiguous States and District of Columbia||Alaska and Hawaii|
|1||$ 548,250||$ 822,375|
|2||$ 702,000||$ 1,053,000|
|3||$ 848,500||$ 1,272,750|
|4||$ 1,054,500||$ 1,581,750|
Maximum Loan Amount for High-Cost Areas 2021
|Units||Contiguous States and District of Columbia|
In 2016, FHFA loan limits were increased for the first time in seven years. Since then, they have increased each year, reaching a total of $131,250 in limit increases over the past six years. By increasing loan limits, the FHFA makes home financing more accessible and home buyers are able to borrow enough to keep up with higher home prices.
Contact us with any questions you have about the updated loan limits in your area, we’re here to help!
Sources: FHFA and HousingWire.