What the 2019 FHFA Increase in Maximum Conforming Loan Limits Means for You
In case you missed the big news in our industry, The Federal Housing Finance Agency (FHFA) announced the new maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac. Starting in 2019, the maximum conforming loan limit for single family homes will be $484,350, which is an increase from $453,100 in 2018.
That sounds great, but what does it all mean for you moving forward? From who to why to when, we’ve broken this news down to the brass tacks for your loan limit understanding.
How does this impact homebuyers and sellers?
The reason that this limit increase is important is because the most competitive interest rates that you can find are on conforming loans. As soon as you go beyond the conforming loan limit what you find is that you’re being pushed into the jumbo loan market, where interest rates are higher.
This increase in loan amount means more properties will be available at a lower rate for prospective homebuyers, without affecting the sellers in a negative way. The same would also hold true for homebuyers who apply for FHA or VA mortgages. The new VA loan limit is now $484,350 and the FHA loan limit is expected to rise to $314,825.
How does this impact real estate agents?
This increase will certainly make a difference for both prospective homebuyers and those looking to sell their homes, but real estate agents benefit too from a widening of their prospective pools of both buyers and sellers. It also makes a difference when it comes to selling a home. With better interest rates available on larger loan amounts, getting your clients into their dream home may have just gotten a little bit easier.
How does this impact high-cost area limits?
High-cost areas, or areas in which 115% of the local median home value exceeds the baseline conforming loan, will see higher loan limits. The Housing and Economic Recovery Act (HERA) establishes the maximum loan limit for one-unit properties in qualified high-cost areas at $726,525 — or 150 percent of $484,350. To determine whether a property qualifies as high cost and eligible for a larger loan amount call Ross Mortgage today.
As a reminder, the new loan limits are available for conventional conforming loans and VA guaranteed loans today. The new FHA loan limit is effective January 1, 2019.
As your trusted mortgage partner, we are happy to answer any questions you might have about these loan limit increases. Please feel free to contact us here or give us a call at (800) 521-5362.