FHFA announces increased conforming loan limits for 2022
Home prices have been rising throughout the last year, increasing 13.1% from October of 2020 to October of 2021. The median existing home price in that time rose from $313,000 to $353,900 now. To contend with this increase, the Federal Housing Finance Agency (FHFA) is raising its conforming loan limits.
The FHFA announced today the updated baseline conforming loan limit for 2022 will be $647,200. The new limit for one-unit properties in most high-cost areas will be $970,800.
The new limit represents an increase of 18% from last year’s limit.
What does this mean?
Starting in 2022, the baseline for single-unit home mortgages acquired by Fannie Mae and Freddie Mac will increase from $548,250 to $647,200 in most of the continental US, an increase of $98,950. This means you will receive conforming loan rates, as opposed to higher jumbo rates, for any loan below $647,200.
Conforming loan limits are updated each year to reflect the changes in average U.S. home prices. Non-conforming loans, often called jumbo loans, usually have more stringent lending guidelines than conforming loans. So, the updated conforming loan limit makes it easier for you to buy more home in 2022.
Guaranteed Rate has already been offering conforming terms on some non-conforming loans since October, so you don’t have to wait until the New Year to take advantage of these new limits.
How can you take advantage?
This higher loan limit means that you can now potentially qualify for a bigger loan with more favorable guidelines than you could have before. The house you would have previously needed a jumbo loan to purchase can now be bought with a conforming loan, which has many benefits over a jumbo loan, including:
- Lower rates, in general
- More loan options
- Lower down payments
- Less required in mortgage reserves
With the increase in home prices—and competition for homes—that we’ve seen this year, that could help you snag the home that you thought was just out of reach.
Contact a Guaranteed Rate loan officer to see how much money you could borrow under these new limits today.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information.
Guaranteed Rate is not affiliated with the Federal Housing Finance Authority.
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