It’s that time of the year again. On November 26, 2019 the Federal Housing Finance Agency (FHFA) announced the new adjusted 2020 loan limits. With these adjustments, most of the U.S. counties will see an increase, while 43 counties will remain unchanged. Loan limits did not decrease anywhere in the U.S. or its territories.

For Contiguous States, District of Columbia, and Puerto Rico the maximum conforming loan limits for 2020 are as follows:

1-unit     $510,400

2-unit     $653,550

3-unit     $789,950

4-unit     $981,700

FHA has made a change to the Cash-Out Refinance Mortgages that went into effect September 1, 2019, reducing the maximum LTV’s and CLTV’s from 85% to 80%. According to HUD Mortgagee Letter 2019-11sent August 1, 2019, when housing prices are on the rise, the amount of Cash-Out Refinances will soon begin to increase.

Studies have shown a link between increased foreclosures and homeowners having exercised a Cash-Out transaction.  As housing markets begin to decline and homeowners start to realize they have negative equity, they soon find themselves in an unfortunate situation dealing with foreclosure proceedings.