Higher Limits for Conforming Home Loans

The federal government will increase the limits for loans qualifying as conforming home loans, effective January 1, 2017, reported Realtor Mag. Conforming loans are loans that meet the underwriting guidelines of Fannie Mae or Freddie Mac, the government-sponsored entities that acquire mortgages from lenders and ensure a steady flow of money to the mortgage market. Conforming loans have lower rates and less strict underwriting standards than non-conforming ones. The move was prompted by the steady increase in national home values.

In many regions, this means a loan as high as $424,100 will now qualify as a conforming loan, as opposed to the previous baseline of $417,000. However, limits will be higher for some metro areas where home prices are well above the national average. These are referred to as “Super-Conforming” loans, meaning they are higher than the $421,100 limit. For instance, in San Francisco, CA, a mortgage as high as $636,150 will fall under the conforming¬†loan category. ¬†For the entire schedule, please see the attached spreadsheet or PDF from the Federal Housing Finance Agency (FHFA).