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Every year, Fannie Mae & Freddie Mac assess existing loan limits on conventional loans, to see if an increase is warranted due to rising home values. This can be a huge benefit for those who are acquiring home loans near these limits. See below for specifics and how this could impact you.....
For 2020, regular conventional loan limits are increasing from $484,350 to $510,400 (one-unit homes).
Conventional high balance loan limits will be changing from the 2019 level of $726,525 up to $765,600 (one-unit homes).
The above represents 5.4% increases year-over-year, a figure that matches the FHFA Housing Price Index for the 3rd quarter of the year.
Multi-unit homes (duplexes, etc.) have higher loan limits than those one-unit amounts listed above.
FHA generally conforms to the Fannie Mae & Freddie Mac changes, but are more specific to your area. FHA mortgage limits can be found by clicking here.
What Does This Mean For You?
This now fits more loans into the regular and high-balance conventional loan boxes, which means less Jumbo loans.
This is beneficial for those on the edge of loan limits as all conventional loans have more lenient guidelines for qualifying, as well as superior loan terms (lower rates & lower fees).
It may also allow some folks more room to do a cash-out loan and fit within conventional guidelines and terms.
And while these changes don’t officially go into effect until January 1, 2020…we’re taking the higher loan limits now!!
Contact us if you have questions as it pertains to your specific situation…we’re happy to help!