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Industry Announcement: Loan Limit Increases for 2021

Posted by Anna Deibert on Dec 4, 2020 9:35:01 AM

On November 24th, 2020 the Federal Housing Finance Agency (FHFA) announced the new adjusted 2021 loan limits. A majority of the U.S. counties will see an increase, while 18 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 2021 are as follows:

 

1-unit $548,250
2-unit $702,000
3-unit  $848,500
4-unit $1,054,500

 

 

 

 

 

 

 

 

For Alaska, Guam, Hawaii, and the U.S. Virgin Islands the maximum conforming loan limits for 2021 are as follows:

 

1-unit $822,375
2-unit $1,053,000
3-unit  $1,272,750
4-unit $1,581,750

 

 

 

 

 

 

 

 

For Contiguous States, District of Columbia, and Puerto Rico the maximum *High-Cost Area loan limits for 2021 are as follows:

 

1-unit $822,375
2-unit $1,053,000
3-unit  $1,272,750
4-unit $1,581,750

 

 

 

 

 

 

 

 

*Note: several states (including Alaska, Hawaii, Guam, Puerto Rico and the U.S. Virgin Islands), do not have any high-cost areas for 2021. Click here to view the full list of loan limits by counties.

 

FHFA data shows home prices have increased by 7.42% over the past year. This percentage is used to calculate the new maximum conforming loan limits. To calculate for high-cost areas, the conforming loan limits are increased by 150%. The new loan limits will apply to loans delivered after the first of the year. In addition to the FHFA announcement, you can also view the Freddie Mac announcement and the Fannie Mae matrix.

 

In regard to government entities, FHA and VA has not yet announced their new loan limits. VA generally aligns their loan limits with the FHFA loan limits, while FHA loan limits are calculated differently. FHA’s conforming loan limits are typically set at 65% of the FHFA’s conforming loan limits while the high-cost areas are set at 150% of FHFA’s conforming loan limits. FHA and VA should be making their announcement by mid-December.

 

If you are interested in viewing the historical loan limits chart and exploring the history of how loan limits were developed, head to the Conforming Loan wiki page.