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On November 24, 2020 the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2021.

The maximum loan limit for one-unit properties will be $548,250 an increase from $510,400 in 2020. Release.

The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  

FHFA third quarter 2020 House Price Index (HPI) reported that house prices increased 7.42%, on average, between the third quarters of 2019 and 2020. The baseline maximum conforming loan limit in 2021 will increase by the same percentage.

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. 

A list of the 2021 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.

WHAT DOES THIS CHANGE MEAN FOR HOMEOWNERS AND HOMEBUYERS?

This means YOU may be able to:

  • Purchase a higher priced home with more financing options, possibly including lower rates.

  • Refinance an existing, higher-rate “jumbo” loan and possibly drop mortgage insurance.

  • Combine 1st and 2nd mortgage

Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

2021 Conforming Loan Limits Effective January 2021