Right around December 1st of every year, the mortgage industry waits patiently to find out if the conforming loan limits will be adjusted. For many years, this date was much less significant. That was the case up until last year when the loan limits increased for the first time since the economic crisis. This year we were prepared for the change as the Federal Housing Finance Agency (FHFA) announced increases in all but 71 counties.
For Contiguous States, District of Columbia, and Puerto Rico the maximum loan amounts for 2018 are as follows:
1-unit $453,100
2-unit $580,150
3-unit $701,250
4-unit $871,450
High Cost Areas (excluding Puerto Rico)
1-unit $679,650
2-unit $870,225
3-unit $1,051,875
4-unit $1,307,175
For Alaska, Guam, Hawaii, and the U.S. Virgin Islands the maximum loan amounts for 2018 are as follows:
1-unit $679,650
2-unit $870,225
3-unit $1,051,875
4-unit $1,307,175
High Cost Areas
1-unit $1,019,475
2-unit $1,305,325
3-unit $1,577,800
4-unit $1,960,750
Loan limit increases follow the increases we see in home prices. Over the last 4 quarters we saw an increase of 6.8 percent in home prices in the United States. This percentage is the increase we will see in the 2018 loan limits. For high-cost areas we have a ceiling amount of 150 percent of the conforming loan limit.
These new loan limits will apply to loan delivered to Fannie Mae and Freddie Mac in 2018. That means applications taken in 2017, but delivered after the first of the year, can apply the new limits. With this update, loan limits will come into alignment with the rising home values we have been seeing. See the full list of loan limit increases provided by FHFA before they go into effect.
