The Federal Housing Finance Agency (FHFA) announced on November 23rd that the maximum conforming loan limit for 2017 will be $424,100. Conforming loan limit is the maximum amount of money that buyers can borrow in a Fannie Mae or Freddie Mac backed loan for a one-unit property.
For most single-family home buyers, the current limit on a conforming mortgage loan is $417,000. Mortgage balances above that figure are considered “jumbo” loans that typically have higher interest rates. In recent years, however, the spread in interest rates between jumbo and conventional loans has been reduced. Jumbo loans are not eligible to be guaranteed by Fannie Mae or Freddie Mac, government-sponsored enterprises with a mandate to increase the availability and affordability of homeownership.
The increase is the first since 2006. The changes are reflective of increases in the national average home price. In higher-cost areas of the country, limits above $424,100 will be implemented. In areas with the most costly homes, the limit for 2017 will be up to $636,150. The loan limits are based on data from each county. A full view of the changes is available here.