Fannie Mae and Freddie Mac’s loan limit rises to over $ 510,000
The Federal Housing Finance Agency announced on Tuesday that it was increasing compliant loan limits for Fannie Mae and Freddie mac over $ 510,000.
In most of the United States, the maximum compliant loan limit for 2020 will be raised to $ 510,400, up from level 2019 at $ 484,350.
This is the fourth year in a row that the FHFA has increased compliant loan limits after failing to increase them for an entire decade from 2006 to 2016.
In 2016, the FHFA increased Fannie and Freddie’s compliant loan limit for the first time in 10 years, and since then the loan limit has increased by $ 93,400.
In 2016, the Increased FHFA compliant loan limits of $ 417,000 to $ 424,100. Then, the following year, the FHFA lifted loan limits of $ 424,100 to $ 453,100 for 2018. And in 2018, the Increased FHFA the loan limit of $ 453,100 to $ 484,350 for 2019.
And now the loan limits will reach $ 510,000.
Compliant loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act of 2008, which set the benchmark loan limit at $ 417,000 and required that after a period of declining prices, the limit of benchmark loan cannot rise again until home prices return to previous downward levels.
FHFA data shows that house prices increase by 5.38% on average between the third quarter of 2018 and the third quarter of 2019. Therefore, the maximum reference limit of compliant loans in 2020 will increase by the same percentage.
For areas where 115% of the median local home value exceeds the benchmark compliant loan limit, the maximum loan limit will be greater than the benchmark loan limit. HERA sets the maximum loan limit in these areas as a multiple of the median home value, while setting a “cap” on this limit of 150% of the benchmark loan limit.
Median home values generally increased in high-cost areas in 2019, leading to higher loan maximums in many areas. The new loan limit limit for single unit properties in most high cost areas will be $ 765,600, or 150% of $ 510,400.
Special legal provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the United States Virgin Islands. In these areas, the benchmark loan limit will be $ 765,600 for single unit properties.
Due to the general rise in home values, the increase in the benchmark loan limit and the increase in the loan limit limit, the maximum compliant loan limit will be higher in 2020 in all counties. except 43 or county equivalents in the United States.
For a map showing the maximum loan limits for 2020 in the United States, Click here.
And for a breakdown by county, Click here.