The maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain largely unchanged in 2016 at the existing level of $417,000, the Federal Housing Finance Agency (FHFA) announced Thursday.
Although in most of the U.S. the loan limit will remain at $417,000 for one-unit properties, the conforming limits will increase in 39 high-cost counties.
The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit at $417,000 and mandated that after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels.
“The $417,000 loan limit will stay the same for 2016 because FHFA has determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007,” the FHFA stated in a release issued Thursday.
For higher-cost areas, HERA provides higher limits by setting loan limits as a function of area median home value. The 39 counties receiving higher loan limits in 2016 all saw their home values increase over the last year.
“Although other counties also experienced home value increases in 2015, after other elements of the HERA formula—such as the statutory ceiling and floor on limits—were accounted for, these local-area limits were left unchanged,” FHFA said.
A list of the 2016 maximum conforming loan limits for all counties may be found here.
Written by Jason Oliva