Loan Limits on Government and Conventional Loans For 2023

We will update this blog on loan limits on government and conventional loans with updated content from previous years. In this blog, we will continue to cover the loan limits on government and conventional loans and update you on the 2023 loan limits on government and conventional loans. For the past 12 months, the economy has been volatile. Mortgage rates went from a low of 2.5% to over 7.0% on a 30-year fixed-rate mortgage. Inflation soared to 20-year highs.

The Dow Jones Industrial Average does not know which direction to go. Housing prices have gone up 40% in the past 36 months. The mortgage industry is in shambles. Thousands of mortgage professionals are getting let go. Mortgage companies are closing up shop. Experts forecast that half the licensed loan officers will leave the business in the next six to twelve months.

Will 2023 Be a Good Year To Buy a House?

The refinance market is completely dead. Many newer licensed loan officers have not heard of or done a single FHA, or VA streamline refinance loan.

The only refinance that is showing signs of life is cash-out refinance mortgage loans. In the following paragraphs, we will continue with the older blog on 2022 loan limits on government and conventional loans. The top half of this blog will be the updated 2023 loan limits on government and conventional loans.

2023 Loan Limits on Government and Conventional Loans Increase Again

The housing market is booming. Home prices have increased substantially yearly for the past ten years. There is no sign of any housing market correction. HUD and the FHFA have increased FHA and Conforming Loan Limits for the past five years due to rising home prices.

Every calendar year, lending agencies such as FANNIE MAE, FREDDIE MAC, USDA, FHA, and VA change their maximum loan amount guidelines. Loan limit information is gathered over a 12-month period and adjusted annually. This article will detail when these changes will go into effect for each agency. We will also detail how you can apply for a loan with Gustan Cho Associates. Gustan Cho Associates is always trying to educate our readers on mortgage-related changes. This year we have quite a large change in the conforming and FHA loan limits. In this blog, we will detail the new loan limits, the reason for the change, and how to apply for a mortgage with Gustan Cho Associates to utilize these new loan limits.

Changes in Loan Limits on Government and Conventional Loans

Conforming loan limits and FHA loan limits change every calendar year on January 1 based on the average home price for the previous four fiscal quarters. The Federal Housing Finance Agency, or FHFA, gathers this information. Each year, FHFA is required to publish the average home price index, which gives information on the average home values across the nation.

In 2022, house prices increased by 12.21%. This data was gathered from quarter three of 2021 through quarter three of 2022. Since this increase was above 12%, the FHFA increased the conforming loan limit by the same amount. This was a very substantial change! In most counties across the United States, the 2023 conforming loan limit for a single-unit property will be $726,200.

This is an increase of $79,000 from the previous year when the conforming loan limit was set at $647,200. This was once again a very large increase compared to years past. We don’t think the conforming loan limit increase will be as substantial for 2024 because home appreciation is starting to level out and even decline in some areas across the nation. We will address this next year when FHFA publishes 2023 data.

What Are High-Balance Mortgage Loans?

High balance areas. High-balance or high-cost areas are counties where the local median home value exceeds the conforming loan limit by at least 115%. In these counties, the conforming loan limit for a single-family property can be as high as $1,089,300. This incredibly high loan limit of over $1 million is in counties surrounding the Los Angeles, San Francisco, and Washington, DC, areas.

It is wild to think you can now purchase a home with a conforming loan and have a loan amount above $1 million. Anything above this loan limit in your county will require a jumbo loan, which has a completely different set of qualifications. For more information on jumbo mortgages, please get in touch with Gustan Cho Associates today. We are experts in Jumbo financing.

Loan Limits on FHA Loans Increase For 2023

FHA loan limits for 2023 have also increased substantially. For all effective FHA case numbers assigned after January 1, 2023, the loan limit for most counties across the nation will be $472,030. This is considered the loan limit floor on a single-unit property. In high-cost areas discussed above, an FHA loan limit will be the same as the conforming loan limit for a single-unit property, and it said at $1,089,300. This is considered the loan limit ceiling.

The FHA loan limit is typically set at 65% of the conforming loan limit for easy calculation. The FHA loan limit in the year 2022 was set to $420,680 for most counties. So, there is quite a large increase yearly, over $50,000. Once again, we feel FHA will keep its loan limit unchanged for 2024.

Loan Limits on VA Loans For 2023

VA loan limits. As most of our veteran readers know by now, there is no loan limit for VA financing. With the required entitlement, a veteran can buy a multimillion-dollar house without a down payment. That’s right. You read that correctly.

Due to the Bluewater Navy Vietnam Veterans Act, the VA eliminated its loan limit requirements. For more information on utilizing your entitlement to see exactly how much loan you can qualify for without a down payment, please reach out to the VA experts on the Gustan Cho Associates today.

VA Agency Guidelines on VA Loans

We do not have any overlays on our VA mortgage loans. We do not have a minimum credit score requirement. We follow VA guidelines very closely without anything additional. Many veteran clients of ours were told they do not qualify when they truly do. Please let us put the second set of eyes on your loan application.

Our veterans deserve every break, including purchasing a home without a down payment. Many veterans run into mortgage lender overlays, which hinder their qualifications. We look forward to assisting our veteran clients in 2023.

What Are Jumbo Loans and How Do They Work?

Gustan Cho Associates want to educate our borrowers when choosing to stay under the conforming loan limit or utilize a jumbo mortgage loan. You will utilize a jumbo mortgage if you need to borrow more than your conforming loan limit in your county. A jumbo mortgage in today’s market can be an incredibly expensive mortgage loan.

With interest rates higher than they have been in years past, jumbo mortgage, investors are hedging their capital. You are no longer getting a rock-solid deal utilizing a jumbo mortgage loan. Jumbo mortgage loans also have more strict income requirements and typically require a higher credit score than a conforming loan.

Mortgage Guidelines on Jumbo Loans

A jumbo mortgage may also require extra reserves or verified funds to get to the closing table. These barriers may be a roadblock in the qualification process when utilizing a jumbo loan. The most important thing you must ask yourself when applying for any mortgage program is what is a comfortable monthly payment?

No matter which mortgage product you use, you want to ensure it is affordable for you and your budget. Just because an underwriting guideline says you can afford something does not mean you truly can.

Is It a Good Time To Buy a Home?

Every mortgage borrower has different qualifications and needs. And is it important to stay within your budget? While our team feels that interest rates will fall in the next few years, it is important to base your budget on your current mortgage payment at today’s interest rates for the foreseeable future. Mortgage Broker Nick Aquino of Big Bad Boy Nick Aquino, III, The Vegas Mortgage Pimp, Nevada’s largest mortgage broker representing sex workers of Nevada’s Brothels, said the following:

It is not a good idea to gamble on interest rates falling when budgeting for a home loan. Nobody has a crystal ball and can predict how high rates will go or how low rates will drop. Slightly over a year ago, rates were at 2.5%. Whoever thought rates would triple to 7.25% after one year? Housing demand remains strong. Multiple bidding on the house is seldom reported. However, home prices remain high, and interest rates have not dropped and remained consistently high.

When Will the Increase in Loan Limits on Government and Conventional Loans Start?

Since we are already into the middle of December, these loan limits are in effect as of today for conventional mortgage lending. Since we will not be closing the transaction in the calendar year 2022, all 2023 loan limits are in effect for conventional mortgage loans. If you are utilizing an FHA loan, we must wait to order your FHA case number until January 2, 2023. January 1, 2023, is a federal banking holiday. FHA is very strict on dates of application and ordering FHA case numbers.

To apply for a mortgage loan with Gustan Cho Associates, you will first reach out to Mike Gracz at 630-659-7644 or mike@gustancho.com. Mike will go over your initial qualifications and answer any mortgage-related questions you have. This phone call is very important for the loan process. Being as upfront as possible with any credit, employment, and income issues is important. Gustan Cho Associates have seen nearly every scenario in the mortgage industry and are here to assist and point you in the right direction.

Mortgage Lender With No Overlays on Government and Conventional Loans

After this initial phone call, you will be paired with a licensed loan officer in the state where the property is located. Currently, Gustan Cho Associates are licensed in 48 states. Our team is licensed in all states except New York and Massachusetts, including Puerto Rico. The licensed loan officer in your state will send you an online mortgage application.

This user-friendly web portal will give you step-by-step instructions to complete your application. Part of the application process will give us permission to verify your credit report. After you fill out the application, the portal will allow you to upload your income and asset documentation.

How Do I Start The Mortgage Application Process?

If you need any assistance, reach out to your licensed loan officer. After receiving all this information, your loan officer will run your credit and calculate your income. At this point, you will be run through an automated underwriting system. Depending on those results, you will either be issued a preapproval letter or sent detailed Instructions on how to qualify for a mortgage loan as soon as possible. As mentioned above, we have seen almost every situation possible, and we are here to help you navigate to qualify for the home that fits you and your family best. Once again, the process starts with a simple phone call to Mike Gracz at 630-659-7644, or you may email mike@gustancho.com.

How Long Is The Mortgage Process Timeline From Application To Close?

Our highly skilled loan officers and operations staff are here to assist you with your mortgage needs seven days a week. Our team has coverage in the evenings to help you and your family. Navigate the difficult mortgage process. We are full-time mortgage brokers with over 160 different investors who offer programs to help fit your qualifications.

Our no overlay platform allows us to help more mortgage borrowers than most large banks and lending institutions. So, even if your previous lender has turned you down, we encourage you to contact us for a second opinion. Our team is available to answer any mortgage-related questions. And we look forward to hearing from you.

2022 Loan Limits on Government and Conventional Loans Increases

If you have been following our blogs, you have likely already seen the loan amount increases on conventional mortgage lending and FHA. For 2022, the maximum conforming loan limit in the US is now at  $647,200. The maximum loan amount for FHA will be $420,680. This is in your standard counties across the country and not high-price areas. For 2022, the high-cost FHA and conforming loan limit are capped at $947,800.

Loan Limit Increased For The Past Six Years Due To Skyrocketing Home Prices

These increases were implemented based on the previous 12 months of available data. The measurement used to create loan limits is based on the home price index or  HPI. Over the past 12 months, we saw a 14.42% increase nationwide. This is a good sign for the housing market.

This increase means real estate values are up nationwide. In some areas of the country, the increases have been higher than normal. Even during the COVID-19 coronavirus outbreak, it’s a good sign to see increases throughout the housing market. While some areas of the country have decreased, the home price index is based on a nationwide average. For more information on these increases, please see our blog on FHFA 2022 LOAN LIMITS. 

When Does The New 2022 Loan Limits Take Effect

When can a client utilize the increased loan limits? This is a good question, and it varies per agency. Each agency has its own timeline for when these increases will go into effect. Conventional mortgages already allow increased loan amounts as long as the lock rate is valid through January 4, 2022. This is true for Fannie Mae loans submitted through the desktop underwriter (DU) before December 12, 2021. Those findings receive an approve/ ineligible recommendation when only ineligible due to exceeding the 2021 loan limits.

New FHA and Conventional Loan Limit Takes Effect Before January 2022

As long as the loan amount is within DU compliance with the applicable 2022 loan limits, the AUS can be submitted or resubmitted on or after December 12, 2021. The same is true for Freddie Mac. A loan submitted through a loan prospector (LP) before December 13, 2021, receiving an accept/ ineligible recommendation only due to a loan exceeding the 2022 mortgage limits is acceptable.

This only holds true if the submitted loan amount complies with the applicable 2022 loan limits. 2022 loan limits will be applied to all case files submitted on her after December 13 for Freddie Mac. You may already utilize the 2022 loan limits on all conventional mortgage loans. Anything over the 2022 low ma’am will still fall into the JUMBO mortgage category, which has completely different qualifications.

Loan Limits on Conventional Versus FHA Loans

Since the Federal Housing Finance Agency announced the mortgage limits for 2021, we have received numerous phone calls from clients asking when they will be able to utilize the higher loan amount thresholds. For FHA loans, you cannot close until 2022. FHA loan limits are based on the FHA case assignment date. The new mortgage limit only applies to case numbers submitted on or after January 1, 2022. FHA case numbers must be honored after that date, or the 2022 mortgage limit will be applied.

If your automated underwriting system findings were submitted before this date, the loan is NOT eligible for funding with the higher loan amounts. This is incredibly important if you need higher mortgage limits. A new file and case number must be started and assigned after New Year’s Day, 2022. If this is unclear, please call Mike Gracz at 630-659-7644. Mike can provide clarification and the mortgage limit for your specific County. You may also email mgracz@gustancho.com.

VA Guidelines on Loan Limits on VA Loans

Most veterans are aware that VA mortgage lending no longer has mortgage limits. Blue Water Navy Vietnam Veterans Act of 2019 removed loan limits at the beginning of 2020. President Donald Trump signed this act into law in July 2019. However, VA entitlement is still important for VA mortgage lending.

New loan limits for each county will go into effect after January 1, 2021. Entitlement is calculated based on the county limits, which will go into effect on this date. Although the VA has not officially announced the maximum guarantee amount for these transactions, any loan needing to use the new loan limits must close on or after January 1, 2021. For more information on entitlement and VA mortgage lending, please call Mike Gracz at 630-659-7644.

2022 Loan Limits on USDA Mortgages

USDA lending is slightly different. As of today, USDA lending does not have a maximum mortgage limit. Instead, USDA loans limit income and the home’s value. No specific automated underwriting or loan delivery requirements apply for loan limit purposes for USDA mortgages. USDA mortgages can be a bit tricky. Suppose the home is in a USDA-eligible area. In that case, you will want to utilize USDA ELIGIBILITY MAP to ensure your income and the home’s value are within the allowable thresholds.

2022 Mortgage Limits on FHA Loans Take Effect January 1st, 2022

If you already have a mortgage loan in process that could be outside of the 2021 loan limit but inside of the 2022 limit, you will need to start the transaction over. A new loan file must be disclosed to you.

As mentioned above, you must apply after the new year to utilize the higher limits if this is an FHA mortgage loan. The case number cannot be assigned down the road.

Cash-Out Refinance Loan Limits on Government and Conventional Loans

Cash-out refinances – The conventional route will allow you to utilize the higher loan limit thresholds if you are in the market for a cash-out refinance. Please remember, to utilize the higher FHA mortgage limits; you must wait to apply till January 1, 2022. This low mortgage rate environment is a great opportunity to pay off consumer debt, take out money for investments, or even buy an investment property.

The housing market should stay strong as the country goes through the COVID-19 turmoil. This could be a great opportunity to buy a foreclosed or multi-unit investment property. For more information on cash-out refinances, please give us a call today.

When Should I Start Preparing To Qualify For a Mortgage

Applying for a mortgage with the 2022 mortgage limits and Gustan Cho Associates is easy. Technology is a huge factor in the mortgage industry and has simplified mortgage applications. We are here to assist you seven days a week.

The first step to applying for a mortgage is to call Mike Gracz at 630-659-7644 and have a one-on-one customized mortgage consultation. You and Mike will go over everything from your credit profile, available down payment, monthly budget, and the timeline for closing your new home.

How To Start The Mortgage Qualification and Pre-Approval Process

After your one-on-one mortgage consultation, Mike will pair you with a licensed loan officer in your state. Your loan officer will send you an application link to start the process. That loan officer will request the required documentation based on your sources of income and loan product. Once you send in the required documentation and your loan officer has your credit report verified, you can go over specific qualifications.

A pre-approval letter will be issued based on your debt-to-income ratio, credit score, and down payment available. If, for some reason, you do not qualify today, your loan officer will come up with a customized financial plan to qualify for a home as soon as possible. Buying a home is a big step, and we want to ensure you buy the home of your dreams and not settle for anything less. The team at Gustan Cho Associates has worked with many clients for well over a year before they buy the right home for them.

Choosing a Mortgage Company Licensed In Multiple States With No Overlays

We encourage you to follow our blogs, as mortgage information is constantly released. Every year dramatic changes going to affect it could make or break your qualifications. It is important to select a loan team that is up to date on their guidelines. As mentioned above, we are available seven days a week.

Even if you have been turned down in the past, we may be able to help. The Gustan Cho Associates can lend without mortgage LENDER OVERLAYS. With the COVID-19 coronavirus outbreak, most lenders have added requirements to their mortgage products. Luckily, we have not. We look forward to hearing from you with any mortgage-related questions and are here to help you and your family.

FHFA Increases Conventional Limits

FHFA Increases Conventional Loan Limits For 2022 from $548,250 to $647,200, effective January 2022. This is great news for homebuyers seeking Conventional loans on higher-priced homes. Fannie Mae and Freddie Mac are the two mortgage giants that set conventional mortgage guidelines. FHFA Increases Conventional Limits is due to rising home prices nationwide. There is no word from HUD, VA, or USDA on when they will follow the lead of FHFA on FHFA Increases Conventional Limits. Normally when one agency raises loan limits, the others follow back to back. In this article, we will discuss and cover FHFA Increases in Conventional Limits For 2022.

Conventional Mortgage Loans

For all conventional mortgage loans dated after January 1, 2022, the maximum conventional mortgage loan limits will be increasing to $647,200. This announcement was sudden notice, and not all mortgage lenders will honor the new conventional loan limit increase.

Gustan Cho Associates will honor the new FHFA Increase Conventional Loan Limits for January 2022. We do not have any overlays on government and conventional loans at Gustan Cho Associates

Mortgage Automated Underwriting System Findings

Regardless of lock status, if the underwriting department approves a loan and the borrower requests to take advantage of the increased loan amount parameters, the loan must be re-submitted to Underwriting with new Automated Underwriting System Findings for consideration.

All revised loan amounts are subject to the most recent guideline changes and eligibility criteria. FHFA publishes conventional conforming loan limits.

Federal Housing Finance Agency

The Federal Housing Finance Agency (FHFA) is the governmental agency in charge of Fannie Mae and Freddie Mac. Fannie and Freddie are the two mortgage giants that set conforming lending guidelines.

In 2016, the FHFA increased Conventional Loan Limits for home loans sold to Fannie Mae and Freddie Mac since the 2008 Real Estate and Mortgage Meltdown. The Federal Housing Finance Agency is increasing the Conventional Loan Limits again for the sixth year. This FHA Increases Conventional Loan Limits for 2018 is the second time since 2006.

Loan Limits on Government and Conventional Loans Increases Due To Increasing Home Prices

The conforming loan limits will increase to $647,200, a substantial increase of the conventional loan limit from the current $548,250. All conventional loan limits for Fannie Mae and Freddie Mac need to be set and determined by The Housing And Recovery Act of 2008.

The FHFA announced that the agency’s increasing conforming loan limits are due to housing values rising nationwide. Due to the increase in home prices, the Federal Housing Finance Agency is increasing the conventional loan limits for the second year.

Loan Limits on Government and Conventional Loans Increase Due To Rising Home Prices

The 2021 Federal Housing Finance Agency third quarter House Price Index Report revealed that home prices increased 6.8% during the third quarter of 2020 and 2021. The House Price Index Report estimates the increase in home values in the United States over the last four quarters. Conventional Loan Limits in high-cost areas as well. High-cost areas are counties where 115% of the local median home value surpasses the baseline mortgage loan limits.

Homebuyers looking for a direct lender with no lender overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.

UPDATE TO THIS BLOG ON Loan Limits on Government and Conventional Loans

Gustan Cho Associates Media News will keep updating older blogs, giving our viewers up-to-date, timely, accurate information regarding mortgage guidelines and news. We will leave older blogs intact for archival purposes. Please do not hesitate to contact us at gcho@gustancho.com if you need very updated news information.

The housing market has been booming for the past several years. HUD and the FHFA have been increasing FHA and Conventional loan limits for the past four years. The 2022 FHA loan limit is now capped at $420,680. The 2022 Conforming loan limit is now capped at $647,200. Even after the coronavirus pandemic hit the Nation, the housing market was not affected and was still booming.

There is more demand for homes than in inventory. Many experts and analysts thought the United States would have a second real estate market meltdown due to the COVID-19 pandemic. This turned out to be false and not true.

Fannie Mae and Freddie Mac are the two mortgage giants in the United States. Fannie Mae and Freddie Mac are private corporations and are called GSEs. Government Sponsored Enterprises set the standards for Conventional Mortgages.

Banks and private mortgage lenders need to follow Fannie Mae and Freddie Mac mortgage lending guidelines if they want to sell the Conventional loans they originate and fund to Fannie/Freddie. That is why Conventional Loans are also called Conforming loans. They must conform to Fannie Mae and Freddie Mac’s lending rules and guidelines.

FHFA Increases Conforming Loan Limits Effective Immediately

Effective January 2022, both Fannie Mae and Freddie Mac will be backing Conventional Mortgages that conform to their standards and do not exceed $647,200. The FHFA Increases Conforming Loan Limits For 2022 to $647,200 in most counties of the United States. The FHFA Increases Conforming Loan Limits for 2022 to $970,800 in high-cost counties from the current Conforming Loan Limit.

FHFA Increases Conforming Loan Limits Due To Buyers Being Priced Out of the Housing Market

FHFA Increases Conforming Loan Limits For 2022 will benefit first-time homebuyers to enter the home purchase market. This is because the down payment and general credit requirements for Fannie Mae and Freddie Mac conforming mortgages are much easier to meet than the lending requirements for Jumbo Mortgages. The FHFA Increase in Conforming Loan Limits For 2022 is the sixth increase on Conventional Loans since 2006.

What Are Non-QM Loans?

Non-QM Loans are becoming more and more popular. There are different types of NON-QM Loans. Bank Statement NON-QM Loans are normally for self-employed borrowers. There are NON-QM Loans. As long as you have a 30% down payment and a 640 FICO Credit Score, there is no income verification/no tax returns required. There are many NON-QM Loans with no waiting period after bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sale.

Branch Manager of NEXA Mortgage, LLC. dba Gustan Cho Associates. Mortgage broker licensed in 48 states headquartered in Chandler, Arizona, and regional branch based in Oakbrook Terrace, Illinois. We are experts in FHA, VA. USDA, Conventional Loans. A national reputation for its no-lender overlays on government and conventional loans. We also have large wholesale lending relationships with dozens of lenders of FHA 203k Loans, Reverse Mortgages, Jumbo Mortgages, Non-QM mortgages, Bank Statement Mortgage Loans for self-employed borrowers, and alternative financing. Gustan Cho NMLS 873293 and the team at Gustan Cho Associates are nationally known for being able to do loans other lenders cannot do.

Jumbo Mortgages on a NON-QM Loan Program are becoming more and more popular. Gustan Cho Associates offers 90% LTV Jumbo Loans with no private mortgage insurance required. If you have questions about topics covered in this article or are interested in NON-QM Loan Programs or other creative Conforming and Non-Conforming Mortgage Loan Programs, please contact us at Gustan Cho Associates 800-900-8569 or text for faster response. You can also email Gustan Cho at gcho@gustancho.com. Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.