Conforming Loan Limits Increase In 2017 First Time Since 2006

This BLOG On Conforming Loan Limits Increase In 2017 First Time Since 2006 Was Written By Gustan Cho

The FHFA announced Conforming Loan Limits Increase In 2017 First Time Since 2006. The news of Conforming Loan Limits Increase In 2017 First Time Since 2006 greatly helps out Conventional mortgage borrowers with the surge of rising home prices nationwide. Conforming Loan Limits Increase In 2017 is now at $424,100 from the $417,000 current Fannie Mae and Freddie Mac Conforming Loan Limits. Any mortgage loans higher than $417,000 is called non-conforming loans and falls in the Jumbo Mortgage territory .

What Triggered Conforming Loan Limits Increase In 2017

Real Estate and Mortgage Industry Experts credit the conforming loan limits increase in 2017, which has been the first time of conforming loan limits increase since 2006, was triggered due to the housing markets continuing to recovers which results in higher home values nationwide. This increase in housing values throughout the country has triggered the FHFA, which is the Federal Housing Finance Agency, and the United States Department of Housing and Urban Development, which is HUD and the parent of the Federal Housing Administration or FHA, to increase the conforming loan limits increase in 2017 and also increase the FHA Loan Limits in 2017. Conforming Loans are Fannie Mae and Freddie Mac Conventional Loans and government loans that conform to the following government agency mortgage lending guidelines:

  • FHA Loans under the direction of FHA Guidelines
  • VA Loans under the direction of the United States Department of Veteran Affairs or VA
  • USDA Loans under the direction of the United States Department of Agriculture Rural Development

Conforming Loans Versus Jumbo Mortgages

Conforming Loans have much more benefits than Jumbo Mortgages and are much easier to qualify for Conventional Loans Versus Jumbo Mortgages. Here are the benefits of conforming loans versus jumbo mortgages:

  • Conforming Loans, Conventional Loans, require down payment on a home purchase of 3% down payment for first time home buyers or 5% down payment for seasoned home buyers. First time home buyers are defined for home buyers who did not have any ownership of a home in the past 3 years
  • Jumbo Mortgages traditionally require 20% down payment but there are Jumbo Mortgage Loan Programs with 10% and 15% down payment on Jumbo Mortgages
  • Minimum Credit Score Requirements by Fannie Mae and Freddie Mac is 620 FICO Credit Scores Versus 680 FICO Credit Scores on Jumbo Mortgages

Conforming Loan Limits Increase In 2017 First Time Since 2006 For Conventional Borrowers

The Federal Housing Finance Agency, or FHFA, is the federal agency that is responsible of setting Conventional Loan Limits for conventional mortgage loans that are purchased by both Fannie Mae and Freddie Mac. VA mortgage loans is also included with these guidelines as well. Conforming Loan Limits Increase In 2017 includes for both Conventional Loans and VA Loans. Both Conventional Loans and VA Loan Limits have increased from $417,000 to $424,100 for a single family home and/or one unit home. There are high cost areas in the United States where high cost conforming loan limits apply. The maximum Conforming Loan Limits Increase In 2017 is capped at $636,150 which is an increase from the current $625,500.  Here are Conforming Loan Limits Increase In 2017 For High Cost Counties in the United States:

  • $636,150 for one unit properties
  • $543,000 for two unit properties
  • $656,350 for three unit properties
  • $815,650 for four unit properties

If you are a home buyer that need higher loan amounts than the Conforming Loan Limits Increase In 2017 above, you have two options:

  • Jumbo Mortgages
  • 85-15-5 Piggyback Mortgages

 

FHA Loan Limits Follow Conforming Loan Limits Increase

FHA also increased the FHA Loan Limits In 2017 from $271,050 to $275,665 for one unit properties. This is for most of the areas in the United States and excludes high cost areas.

Here Are The FHA Loan Limit Increases In 2017

  • One Unit Property FHA Loan Limits $275,665
  • Two Unit Properties FHA Loan Limits $352,950
  • Three Unit Properties FHA Loan Limits $426,625
  • Four Unit Properties FHA Loan Limits  $530,150

Increase Of Loan Limits Effective Dates

The Conforming Loan Limits Increase In 2017 is the first time of any loan limit increase since 2006. Many borrowers will benefit from this both the Conventional Loan Limit and FHA Loan Limit Increases.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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