2016 was full of exciting developments from Fannie and Freddie. Fannie Mae has waived the appraisal requirement on certain refi loans while Freddie Mac will introduce automated, no-cost appraisals. Then, there’s the HAMP® extended to and its replacement in October 2017. But the biggest news then and now is that a higher amount can be borrowed under the 2017 conforming loan limits.
$424,100 Is the New Loan Limit
Effective January 1, 2017, the new baseline loan limit is $424,100. This is an increase from the $417,000 limit that has prevailed from 2006 to 2016. The $424,100 limit will be applicable to one-unit properties in most counties in the U.S.
Meanwhile, loans for one-unit properties in high-cost areas can be up to $636,150. This accounts for higher median home values. The new ceiling loan limit is also applicable to states and territories with special statutory provisions — Hawaii, Guam, Alaska, and the U.S. Virgin Islands.
2017 Conforming Loan Limits Per County
The 2017 conforming loans limits for mortgages to be sold to Fannie Mae and Freddie Mac are presented as follows:
- For most counties in the contiguous US states (the 48 adjoining states), Washington D.C. and Puerto Rico, the maximum loan limits are: (a) $424,100 for one-unit properties, (b) $543,000 for two-unit properties, (c) $656,350 for three-unit properties, and (d) $815,650 for four-unit properties.
- For high-cost counties located in the contiguous US states and Washington D.C., the maximum loan limits are: (a) $636,150 for 1-unit homes, (b) $814,500 for 2-unit homes, (c) $984,525 for 3-unit homes, and (d) $1,223,475 for 4-unit homes.
- For Alaska, Guam, Hawaii and the U.S. Virgin Islands, the baseline loan limits are $636,150; $814,500; $984,525; and $1,223,475 for one- to four-unit properties, respectively.
- For high-cost areas in those territories — Alaska, Guam, Hawaii and the U.S. Virgin Islands, the maximum loan limits are as follows: $954,225 for one-unit properties, $1,221,750 for two-unit properties, $1,476,775 for three-unit properties, and $1,835,200 for four-unit properties.
Veterans Benefit From Higher Loan Limits
Borrowers of VA loans also stand to gain from higher FHFA loan limits. The VA home purchase loans are based on the prevailing limits set by the FHFA (Federal Housing Finance Agency), which regulates Fannie Mae and Freddie Mac.
The VA does not set any limits to the amounts that can be borrowed under the loans it guarantees. It rather uses the 2017 conforming loan limits as a guide in calculating its maximum loan guaranty.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.
