New Conforming Loan Limits in 2018The Federal Housing Finance Agency (FHFA) announced new maximum loan limits effective January 1, 2018 for conforming loans.
In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017. Higher loan limits will be in effect in higher-cost areas. New loan limits, however, will not take effect in 71 counties or county equivalents around the country.
What prompted this change? The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year to reflect the change in the average U.S. home price.
On November 28, FHFA published its third quarter 2017 House Price Index report, which included estimates for the increase in the average U.S. home value over the previous four quarters. According to the report, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017. Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.
With home prices on the rise, the conforming loan limit increase opens up opportunities and helps keep home loans more affordable for more Americans.
If you'd like to learn more about these new loan limits or other loan products, please get in touch with me today. I'm happy to help!