2019 Loan Limits
Updated: Feb 7, 2019
Loan limits have increased for 2019; $484,350 for conforming loans and $726,525 for High Balance loans.
Every year, the Federal Housing Finance Agency evaluates whether or not the loan limits for Fannie Mae (FNMA) and Freddie Mac (FHLMC) are in line with increasing home values throughout the country. The national average home price over the past year increased 6.9%; and accordingly, that is the amount the loan limit was increased this year (previously $453,100 in 2018). High Balance loan limits are set for high cost counties. A county is deemed to be high cost if that county's average home price is 115% or higher than that of the national average. High Balance loan limits for these counties are always 150% of the conforming loan limit. This change applies to FHA and VA loans as well.
So what does this mean for my mortgage? Good question. Most borrowers will end up a conventional loan, underwritten to the guidelines of and securitized by FNMA or FHLMC. These government-sponsored enterprises supply the housing market with low-cost, low-down payment loans among other flexible options. For example, if you were looking at buying a home for $760,000, in 2018 you would have needed more than 10% in a down payment to get down to the High Balance loan limit. Now, with the limit increase, you can put down just 5% on that same house and be eligible for a FNMA/FHLMC loan program.
I will get into the weeds with these loan programs and what to do if you want a home that will require a loan amount above these limits, but this is great news for home affordability!
The FHFA official announcement can be found here: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2019.aspx