FHFA announces increased conforming loan limits for 2023
The US housing market has been a record string of home price increases, with home values going up for a record 128 consecutive months in October of 2022. The median existing home price a year ago was $353,900—now it is $379,100, down from its all-time high of $416,000 in June. To contend with this increase, the Federal Housing Finance Agency (FHFA) is raising its conforming loan limits.
The FHFA announced today the updated baseline conforming loan limit for 2023 will be $726,200. The new limit for one-unit properties in most high-cost areas will be $1,089,300—above one million dollars for the first time ever.
The new limit represents an increase of $79,000 from 2022’s limit.
What does this mean?
Conforming loan limits are updated each year to reflect the changes in average U.S. home prices. A conforming loan meets the requirements and dollar limits set by the FHFA and the lending guidelines set by Freddie Mac and Fannie Mae. Non-conforming loans, often called jumbo loans, usually have more stringent lending guidelines than conforming loans. So, the updated conforming loan limit makes it easier for you to buy more home in 2022.
Starting in 2023, the baseline for single-unit home mortgages acquired by Fannie Mae and Freddie Mac will increase from $647,200 to $726,200 in most of the continental US. This means you will receive conforming loan rates, as opposed to higher jumbo rates, for any loan below $726,200.
Guaranteed Rate Affinity has already been offering conforming terms on some non-conforming loans since September, so you don’t have to wait until the New Year to take advantage of these new limits.
How can you take advantage?
This higher loan limit means that you can now potentially qualify for a bigger loan with more favorable guidelines than you could have before. The house you would have previously needed a jumbo loan to purchase can now be bought with a conforming loan, which has many benefits over a jumbo loan, including:
- Lower rates, in general
- More loan options
- Lower down payments
- Less required in mortgage reserves
With the steady increase in home prices over the past few years, this new loan limit could help you snag the home that you thought was just out of reach.
Contact a Guaranteed Rate Affinity loan officer to see how much money you could borrow under these new limits today.
Guaranteed Rate Affinity is not affiliated with the Federal Housing Finance Authority.