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house logo with ascending arrowCheck out the new release below. Conforming loan limits will increase from $417,000 to $424,100 in 2017. This is the first increase in almost 10 years.

FHFA Announces Increase in Maximum Conforming Loan Limits for Fannie Mae and Freddie Mac in 2017

FOR IMMEDIATE RELEASE
11/23/2016
Washington, D.C.

The Federal Housing Finance Agency (FHFA) today announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2017 will increase. In most of the country, the 2017 maximum loan limit for one-unit properties will be $424,100, an increase from $417,000. This will be the first increase in the baseline loan limit since 2006. In higher-cost areas, higher loan limits will be in effect.

The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit of $417,000 and requires this limit to be adjusted each year to reflect the changes in the national average home price. However, after a period of declining home prices, HERA also made clear that the baseline loan limit could not rise again until the average U.S. home price returned to its pre-decline level. Until this year, the average U.S. home price remained below the level achieved in the third quarter of 2007 and thus the baseline loan limit had not been increased.

Earlier today FHFA published its third quarter 2016 House Price Index (HPI), which makes clear that average home prices are now above their level in the third quarter of 2007. The expanded-data HPI value for the third quarter of 2016 was roughly 1.7 percent above the value for the third quarter of 2007, and thus the baseline loan limit will increase by that percentage.

High-cost areas
In areas where 115 percent of the local median home value exceeds the baseline loan limit, the maximum area loan limit will be higher. HERA sets the maximum loan limit as a function of the area median home value, while setting a “ceiling” on that limit of 150 percent of the baseline loan limit.
This year, median home values generally rose in high-cost areas. Because the baseline loan limit will be higher in 2017, the new ceiling limit will also be higher. The new ceiling loan limit, which applies in areas with the most expensive homes, will be $636,150 (150 percent of $424,100) for one-unit properties in the contiguous U.S.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $636,150 for one-unit properties, but actual loan limits may be higher in some specific locations.

County-level data
As a result of generally rising home values, the increase in baseline loan limit, and the rise in the ceiling loan limit, the maximum loan limit rose in all but 87 counties (or county equivalents) in the country.

A list of the 2017 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here. A map showing the maximum loan limits across the country can be found here. A description of the methodology used for determining the maximum loan limits can be found in an addendum to this news release and a short video shows the process used and why the loan limit is rising.

Questions concerning the maximum conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov.

Source:Federal Housing Finance Agency (FHFA)

house logo with ascending arrowGreat news friends – buyers in the DFW metroplex (and surrounding areas) will see increased purchasing power thanks to FHA’s decision to increase loan limits beginning in January 2014.  Currently the maximum loan amount for the DFW area is $271,050.  With a 3.5% down payment (FHA’s minimum down payment requirement) this yields a purchase price of $280,880.  However, HUD’s Mortgagee Letter 2013-43 released 12/6 states, as of January 1, 2014 buyers will be able to purchase a $297,900 home using FHA’s minimum down payment loan.  That’s an increase of $17,000+ in purchasing power.

This is more GREAT news for our local real estate community – confirmation that DFW Rocks!

Use this link to search your specific county loan limit (remember to change the year to 2014) – Search FHA Loan Limits

For more info on this and all things mortgage and real estate related be sure to tune in to Real Time Real Estate DFW with Cole Saturdays @ 1pm on KWRD 100.7fm the Word (you can also listen online here Listen to Cole Online!