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Snippets from Tippett Blog

The focus of Snippets is to educate and provide industry insight. Our promise is to enlighten and showcase market trends pertaining to mortgage lending, finance and the housing market.


Mortgage Lending Limits Increase Significantly in 2019

Mortgage Lending Limits Increase Significantly in 2019: Great news for everyone, especially I high cost areas like Fairfield County, CT. Higher loan amount levels mean Fannie & Freddie will insure more loans at higher amounts to which lenders will be able to offer their best pricing outside of the jumbo marketplace. Typically Jumbo & super Jumbo loans come with higher rates & more scrutinized underwriting .

via Forbes


Mortgage Lending Limits To Increase Significantly For 2019

Amy Dobson, Contributor

Good news for homebuyers who don't want to enter into a jumbo loan for their next mortgage. The Federal Housing Financing Agency announced last week the conforming loan limit—or threshold over which a loan becomes "jumbo"—will rise by over $30,000 for most counties in the U.S. For 2019 the new limit will be $484,350 for one-unit dwellings, an increase of $31,250, or 6.9%, over the 2018 limit of $453,100.

For high-cost of living areas, defined as 115% of the local median home values exceeding the above baseline number, the new threshold will be $726,525, up from $679,650 in 2018. Alaska, Hawaii, Guam and the U.S. Virgin Islands will also increase to $726,525. As per the regulations the threshold for HCOL is calculated as 150% of the baseline conforming loan limit. Thus, for high-end counties the increase is $46,875 higher than last year.

Conforming Loan Limits by County for 2019  FEDERAL HOUSING FINANCE AGENCY

Conforming Loan Limits by County for 2019 FEDERAL HOUSING FINANCE AGENCY

These increases are a direct result of the rising prices seen throughout the country. Each year the FHFA increases (or decreases, if needed) the loan limits in lock step with the increase in home prices. Since their House Price Index showed an increase of 6.9%, their loan limits rose accordingly. This will be the third time in 14 years that they have raised the threshold, and each of those three increases have taken place over the past three years. From 2006 to 2016 the limit stayed the same at $417,000 (or $645,300 for HCOL areas). They rose by $7,100 into 2017 (to $424,100). Then a huge jump from 2017 to 2018 when they rose by $29,000 to $453,100. Now a slightly bigger increase of $31,250 heading into 2019. You can explore their Home Price Index by state and year if you go to their interactive map here.

Brad Tippett