FHFA Raises Loan Limits For 2020


Due to rising home prices, the Federal Housing Finance Agency (FHFA) has raised the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2020 to $510,400 – up from the current limit of $484,350.

The new ceiling for one-unit properties in most high-cost areas will be $765,600 – or 150% of $510,400.

This marks the fourth straight year that the FHFA has increased the conforming loan limits. The agency didn’t not increase them at all from 2006 to 2016 – which includes the period during which home prices recovered from the impact of the Great Recession.

The FHFA is required to establish new baseline loan limits annually as stipulated by the Housing and Economic Recovery Act (HERA).

According to FHFA’s seasonally adjusted, expanded-data home price index report, U.S. home prices increased 5.38%, on average, between the third quarter of 2018 and the third quarter of 2019. Therefore, the baseline maximum conforming loan limit in 2020 will increase by the same percentage.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $765,600 for one-unit properties.

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