The Federal Housing Finance Agency announced new baseline conforming loan limits for Fannie Mae and Freddie Mac in 2021: $548,250.
This is a 7.5% increase from the 2020 limit of $510,400 and marks the fifth consecutive year of increases from the FHFA.
This is important because now buyers and borrowers can purchase a higher priced home and still stay within conforming loan guidelines. That means easier qualifications at higher price points.
In 2016, the FHFA increased the Fannie and Freddie conforming loan limits for the first time in 10 years. Since then, the baseline loan limit has gone up by $131,250.
These new limits apply to conventional, conforming loans (those sold to or backed by Fannie Mae and Freddie Mac), for both refinances and purchases. Any loan amounts above these limits would be considered “jumbo” loans and fall outside of conventional guidelines.
Do I have to wait until 2021 to take advantage of a higher conforming loan amount?
Actually, no. The change actually applies to the date that Fannie and Freddie sign off on the new loan (either via “delivery” or “securitization”).
Essentially, any loan originated today would most likely close in 2021 and fall under the new loan limits.
Please do contact me for more information!
