The Federal Housing Finance Agency (FHFA) announced on Tuesday, November 24th, that the conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will increase 7.42% in 2021. The new maximum conforming loan limit (CLL) for one-unit properties in most of the U.S. will be $548,250, up from $510,400 in 2020. This will be the fifth straight year that the FHFA has increased the CLL.
This percentage increase follows the Housing and Economic Recovery Act (HERA) requirement that the baseline CLL be adjusted each year for Fannie Mae and Freddie Mac to follow the change in the average U.S. home price. According to the FHFA House Price Index® (FHFA HPI®) report, which estimates the average U.S. home value increase over the last four quarters, the increase was 7.42%, thus the percentage increase to the CLL limit. Areas where 115% of the local median home values exceed the baseline CLL will have a higher baseline loan limit. This new limit, with a “ceiling” on that limit of 150% of the baseline loan limit, will be $822,375, or 150% of $548,250.
Rising home values, the increase in the baseline loan amount, and the new ceiling loan amount will raise the maximum conforming loan limit in 2021 in all but 18 counties or their equivalents in the U.S.
If you’re looking to purchase a home in 2021, call the experts at NASB at 888-661-1982*.
*Loan must close after Jan 1, 2021, to receive new CLL.
