Effective January 1, 2017, the Federal Housing Finance Agency (FHFA) will raise conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac.
The conforming loan limit will be raised from $417,000 to $424,100 for single family homes. Loan limits will also be increasing in identified “high cost” counties where 115% of the local median home value exceeds the baseline loan limit. A full list of county loan limits can be found here.
This will be the first increase since 2006 and the housing crisis and an exciting change for the mortgage industry for professionals and home buyers alike. This change is a result of housing prices risen above where they were in 2007. The increase is roughly 1.7% above 2007’s average home price and thus the baseline loan limit will be increased by that percentage.
So what does the increase mean for home buyers? More options for qualified borrowers, flexible terms for government backed mortgages, increased buying power with lower down payments and a stronger housing market to buy and sell in are just a few of the advantages for home buyers.
If you’re looking to discuss this change further or start the home buying process, fill out Summit Funding’s Get Started form here or see our list of branches nearest you here to get in contact with a loan officer today!