It’s been a decade since conforming loan limits have increased, but when the New Year arrives, the maximum limit will increase from $417,000 to $424,100.
For conventional loan products that allow low down payments— HomeReady™, Piggyback and Conventional 97 — this gives consumers in 2017 a little more buying power for a fraction of the upfront costs.
“The Housing and Economic Recovery Act of 2008 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,” according to Fannie Mae.
In the third quarter of 2016, the House Price Index shows the average home price is the highest it has been since the third quarter of 2007.
The threshold for jumbo loans in high-cost areas will also rise in 2017. In many places, the limits for conforming loans will increase to $636,150 (150 percent of $424,100) for one-unit properties. For more information, go to www.FannieMae.com/SingleFamily/Loan-Limits.
According to Fannie Mae, rising home values have caused the new maximum loan limit to increase “in all but 87 counties in the country.” In Florida, all counties will increase, with Collier and Monroe counties having higher limits at $450,800 and $529,000, respectively.
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