New Conventional Loan Limits

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Filed under: Market Comentary

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Every year during this time, Fannie and Freddie roll out their new lending details for the next year. This week, the Federal Housing Financing Agency (FHFA) announced the 2020 loan limit. These new limits are essentially available today.

New Lending Limits

The new base lending max throughout the US is $510,400. Regardless of where you are, you can borrow up to that amount. That’s up about $30,000 over last year. The high balance limit is $765,600, which means that you can get a conventional loan up to that amount in specific counties. Both LA and Orange Counties in California are at this max, as well as King in Washington. This means that if you are in the local area, you can purchase a home up to $805,000 and only put 5% down!

Why are Loan Limits Increasing?

These new limits are a reflection of the increasing home prices across the nation. The FHFA makes these adjustments so that borrowers can qualify for the financing needed to meet their goals of homeownership.

The FHFA House Price Index report was released, indicating that home prices increased 5.38% on average between 2018 and 2019. So, the baseline loan limit is also being increased by the same amount to match.

Both limits are increased, which is a nice change for us to be able to lend a little higher. This is especially important in South Riverside County since it’s one of the more expensive areas in the county. There are many $500,000 – $800,000 homes in the area, and this change gives more opportunities for people who are ready to buy.

Are You Ready to Buy a Home?

If you’ve been thinking about buying or refinancing, then it might be a great time to make your move. Some people have been delaying this decision because of funding limitations due to the high cost of homes in the area.

As always, I’m here to answer your questions about home financing. Reach out any time! I hope that you have a Happy Thanksgiving and enjoy quality time with your family this holiday weekend!

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