Fannie, Freddie Boost Conforming Loan Limits
In a move that will add liquidity to the mortgage market, Fannie Mae and Freddie Mac announced last week they are raising their single family conforming loan limits from the current $359,650, to $417,000. The 16% rise in the conforming loan limit is the largest since 1980 and reflects the run-up in home prices nationwide over the past year.
The conforming loan limit is the maximum amount of loan that each company will generally buy from credit unions and banks.
The two secondary mortgage market companies estimated the increase would put lower cost loans within reach of as many as 466,000 more buyers. Also effective Jan. 1, the conforming loan limit for larger properties is $533,850 for two-unit mortgages; $645,300 for three-unit mortgages; and $801,950 for four-unit mortgages.