FHFA Increases Conforming Loan Limits for Fannie, Freddie in 2020

The Federal Housing Finance Agency (FHFA) announced on Tuesday that it would be increasing the conforming loan limits on mortgages to be acquired by Fannie Mae and Freddie Mac for the fourth consecutive year.

In most of the United States, the maximum conforming loan limit for one-unit properties in 2020 will be $510,400, an increase from $484,350 in 2019. For areas that generally feature higher-than-average home values, defined as places where median home values exceed 115% of the baseline, FHFA has set a higher maximum figure of $765,600 for 2020, up from 2019’s figure of $726,525.

“As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county equivalents in the U.S.,” FHFA said in an announcement of the new loan limits.


FHFA does not have authority over the lending limits tied to reverse mortgages; however, the Federal Housing Administration (FHA) has typically aligned them with the new Fannie and Freddie limits in previous years. Last year, the loan limit handed down by the Department of Housing and Urban Development (HUD) for federally backed reverse mortgages in 2019 was $726,525, matching FHFA’s aforementioned high-cost limit for that same year.

The Housing and Economic Recovery Act (HERA) of 2008 dictates that the baseline conforming loan limit must be adjusted annually for Fannie and Freddie in order to reflect changes in the average U.S. home price.

According to FHFA’s third quarter 2019 Housing Price Index (HPI) report also published on Tuesday, home prices increased by an average of 5.38% between the third quarters of 2018 and 2019. Because of this, the baseline maximum conforming loan limit in 2020 will increase by the same percentage, FHFA said.

You can find FHFA’s official announcement of the new loan limits by clicking here.

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  • Chris,

    Your presentation was thoughtful and accurate. Unfortunately some in the industry are claiming that the 2020 HECM lending limit will be $756,600 which for now is not the case.

    Until HUD releases a Mortgagee Letter as it has in the last few years, setting a new lending limit for calendar 2020, there is no change increasing the HECM lending limit. In the last few years HUD has released that Mortgagee Letter sometime in early December of the calendar year immediately before the new lending limit will go into effect.

    So based on prior practice if HUD has decided to raise the HECM lending limit for 2020 it should release a Mortgagee Limit to that effect sometime before December 19, 2019.

  • Regarding the last point – that borrowers do not have the necessary forms. I always provide them with a Counseling Access Code, so both borrower and counselor have access to ALL the documents included in the borrowers’ specific Proposal. Is this not common practice, or is this still a problem? Thanks.

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