FHFA Raises GSE Conforming Loan Limits


The Federal Housing Finance Agency last week raised maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac for the second year in a row.

FHFA said (https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2018.aspx) beginning Jan. 1, in most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017.

The new limits take effect in all but 71 U.S. counties or their equivalents. A map can be accessed at https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx.

The Housing and Economic Recovery Act requires the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect changes in the average U.S. home price. According to FHFA’s seasonally adjusted, expanded-data House Price Index, house prices increased by 6.8 percent, on average, between the third quarters of 2016 and 2017, resulting in a corresponding increase in the 2018 baseline maximum conforming loan limit.

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit the maximum loan limit will be higher than the baseline loan limit.  HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling” on that limit of 150 percent of the baseline loan limit. Median home values generally increased in high-cost areas in 2017, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $679,650–or 150 percent of $453,100.

FHFH said special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $679,650 for one-unit properties, but loan limits may be higher in some specific locations.

A list of 2018 maximum loan limits for all counties and county-equivalent areas in the U.S. can be accessed at https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx.