On January 1, 2019 Conforming Loan Limits Increase

For the third consecutive year, FHFA has increased conforming loan limits. Increasing loan limits reduces the downpayment buyers need to qualify for homes in the District of Columbia real estate market, recognized as one of the most expensive in the country. The increase will also help many buyers keep their interest rates low since Jumbo loans typically carry higher rates than conforming loans.

You can take advantage of the new limits if you close after January 1, 2019.

• For one-unit properties located in areas that are not designated as high-cost, the 2019 maximum loan limit is increasing from $453,100 to $484,350.,an increase of 6.9% from 2018 to 2019.

• For one-unit properties located in areas in which 115% of the local median home value exceeds the baseline conforming loan limit, (high-cost areas such as DC), the 2019 maximum loan limit will be $726,525 – or 150% of 484,350.

The FHFA’s Q3 2018 House Price Index report, (estimates the increase for average home value nationwide over the past four quarters), showed an average increase of 6.9%, so the maximum conforming loan limit in 2019 increased by the same percentage.

View limits for your area

View 2019 maximum loan limits map

What’s A Conforming Loan?

NerdWallet explains it well: “The government-sponsored entities that drive the home loan market are Fannie Mae and Freddie Mac. These behind-the-scenes companies provide a secondary market for mortgages, allowing lenders to package loans into investment bundles, sell them and lend again.

As part of their structure, they are legally bound to purchase various types of mortgage loans under a certain value, known as the “conforming loan limit.” The Federal Housing Finance Agency sets the national conforming loan limit.”

About Conforming Loan Limits

The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act of 2008, which established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels.

The national conforming loan limit for mortgages that finance single-family one-unit properties increased from $33,000 in the early 1970s to $417,000 for 2006-2008, with limits 50% higher for four designated high cost areas: Alaska,  Hawaii, Guam, and the U.S. Virgin Islands.  Since 2008, various legislative acts increased the loan limits in certain high-cost areas in the United States.  While some of the legislative initiatives established temporary limits for loans originated in select time periods, a permanent formula was established under the Housing and Economic Recovery Act of 2008 (HERA).  The 2019 loan limits have been set under the HERA formula. More from FHFA

FHA Loan Limits

FHA Loan Limit Lookup

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