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Fannie Mae and Freddie Mac increase limits in most U.S. counties

The Federal Housing Finance Agency (FHFA) has announced that the maximum conforming loan limits for mortgages will increase to from $484,350 to $510,400 in 2020. The announced increase is for loans for one-unit properties that are to be acquired by Fannie Mae and Freddie Mac in most areas of the United States. 


It is required by the Housing and Economic Recovery Act (HERA) that the baseline conforming loan be adjusted each year to reflect changes in the average home price. According to FHFA’s third-quarter 2019 House Price Index (HPI) – which includes estimates for the increase in the average U.S. home value over the last four quarters – home prices increased an average of 4.9 percent between the third quarters of 2018 and 2019. This causes the baseline to increase for 2020 by the same percentage. 

Higher-priced regions

For areas with significantly higher home values, the maximum loan limit will be $765,600 or 150 percent of $510,400. This figure is calculated in areas where 115 percent of the local median home value exceeds the baseline conforming loan limit. HERA establishes the maximum loan limit as a multiple of the area median home value, while setting a "ceiling" of 150 percent of the baseline loan limit. Median home values generally increased in high-cost areas in 2019, so the maximum loan limits were driven up in many areas.

There are special provisions for Alaska, Hawaii, the U.S. Virgin Islands and Guam. In these areas, the baseline loan limit will be $765,600 for one-unit properties, but loan limits may be higher in some locations.

An increase for majority of country

Bottom line, the increase in the ceiling loan limit and the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county equivalents in the U.S.  

For a full list of the 2020 maximum loan limits for all counties and county-equivalent areas in the U.S. click here

For a map showing the 2019 maximum loan limits across the U.S. click here.

 

For a detailed description of the methodology used to determine the maximum loan limits in accordance with HERA, click here.