FHFA Increases Loan Limits for 2019
The Federal Housing Finance Agency (FHFA) has increased their threshold on loans for 2019. The loan limit ceiling has increased to $484,350, an increase from $453,100 for Fannie Mae and Freddie Mac loans.
This change will also be impacting FHA – insured Home Equity Conversion Mortgages with an increase to $679,650 up from $636,150. This means that more loans will be able to avoid going “jumbo” by raising the ceiling for conforming loan limits. The last increase happened in 2016 when 188 US counties had loan limits increased. Now, over 3,000 U. S. counties will benefit from this increase.
All around good news for home buyers who are in the market for a higher priced home!
Every year, the FHFA evaluates loan limits in lock step and will assess whether a change is needed. This year, rising prices dictated a change in loan limits to better serve the housing market. An average increase of 6.9 percent in house prices allowed maximum conforming limits to increase by the same amount.
What does this mean for borrowers?
More borrowers searching for a home may qualify for traditional Fannie Mae and Freddie Mac loans without having to utilize a jumbo loan. Fannie Mae and Freddie Mac are the government agencies through which the majority of U.S. mortgage loans are backed but only to a certain price. Once this threshold is surpassed, the loan becomes jumbo and is no longer backed by the government entities, Fannie Mae and Freddie Mac.
Additionally, the application process for a jumbo loan requires higher credit scores, stronger credit history and in most cases a much larger down payment.
Want to learn more about conforming loan limits or how to finance your home? NOVA ® Home Loans will help you every step of the way! Give us a call!