Fannie Mae and Freddie Mac Baseline Limit Will Increase to $453,100

RELEASE FROM THE FHFA
“Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2018. 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.

Baseline limit

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third quarter 2017 House Price Index (HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.  According to FHFA’s seasonally adjusted, expanded-data HPI, 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. ”

What does this mean for you?

The increase in loan limits will ease lending standards across the board. For people looking to buy a bigger home this will make conventional rates more accessible. With home prices rising still buyers will need access to higher loan limits to afford the same house as they did the previous two years. This news may also effect rates and buying in general for the housing market in 2018.

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