Conforming Loan Limits Increase Across the U.S. for the Third Consecutive Year

The Federal Housing Finance Agency (FHFA) is increasing conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. This is the third consecutive year the FHFA has increased conforming loan limits, after a 10-year period of no increases from 2006 and 2016.

Across most of the U.S., the maximum conforming loan limit for one-unit properties will be $484,350, a 6.9 percent increase from the 2018 limit of $453,100.

In certain high-cost areas where 115 percent of the local median home value exceeds the conforming loan limit, FHFA has set a higher maximum limit of $726,525 for one-unit properties in 2019, up from 2018’s figure of $679,650.


2019 Baseline Loan Limit

2019 High-Cost Area Ceiling Limit


How are the Loan Limits Determined?

The Housing and Economic Recovery Act (HERA) dictates that the baseline conforming loan limit be adjusted annually for Fannie Mae and Freddie Mac in order to reflect fluctuations in the average U.S. home price.

According to FHFA’s third quarter 2018 House Price Index (HPI) report, home prices increased 6.9 percent, on average, between Q3 2017 and Q3 2018. As a result, the baseline conforming loan limit in 2019 will increase by that same percentage to $484,350.

In high-cost areas, HERA requires the maximum loan limit to be calculated as a multiple of the area median home value, with a “ceiling” limit set as 150 percent of the baseline loan limit.

The FHFA’s third quarter 2018 HPI report shows median home values in high-cost areas “generally increased” in 2018, driving up the maximum loan limits in many areas. The new ceiling limit for one-unit properties in most high-cost areas will be $726,525, or 150% of $484,350.

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