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2018 Loan Limit increase to

2018 Loan Limit Increases to $453,100

The Federal Housing Finance Agency (FHFA) announces that Conventional loan limit will increase in all but 71 Counties in 2018.

In most of the Country, the 2018 maximum conforming loan limit will increase to $453,100, up from $424,100 in 2017.

In high cost Counties, the maximum high balance conforming loan limit will increase to $679,650, up from $636,150 in 2017.

The Conforming limit has increased a lot over time.  Over the years from $33,000 in the early 1970s to $417,000 that lasted from 2006 to 2017.  The new 2018 limits would be the second increase in 2 years.

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New Loan Limit Available Now?

Many lenders are allowing the 2018 loan limits NOW (as of November 30th, 2017).  Christmas may have come early this year!

Early adopter investors will originate your home mortgage loan now, and deliver it to Fannie Mae in 2018.

If you’re reading this article in 2018, the new loan limits should be common and all lender should be on board with the update.

New Loan Limit for Home Buyers

How will the increased loan limit affect home buyers?  It could affect you a couple of different ways, depending on the neighborhood that you’re buying in.

It’s not unusual to fall in love with a home in a neighborhood that for the most part you’re priced out of.

This is great news if you’re that buyer that has been struggling to find your dream home and avoid jumbo underwriting guidelines.

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A Jumbo mortgage is going to require a minimum 20% down payment.  You can find Jumbo portfolio loans that will allow between 10% and 15% down payment, but expect much higher rates and fees.

There may be a couple of homes in your price range, but everything else in the community is priced north of the old loan limit, and you don’t a 20%

Increased loan limits will make it easier for average families to qualify for an affordable mortgage.  In a high cost County, you can now qualify for a $679,650 mortgage with as little as 5% down payment.

New Loan Limit for Home Owners

As a home owner, the higher loan limits will allow you to do a cash out refinance if your loan balance is currently at the maximum.

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With the conforming loan limit increasing, you can now pay off that holiday debt or do those home improvements you’ve had your eye on.

Jumbo financing is much more restrictive than most other mortgages.  Being able to qualify for conventional financing at the new higher loan limit is going to solve that challenge.

How Loan Limit Affect Home Values

Communities that saw home prices creep up over the conforming loan limit may begin to see more competition from Conventional home buyers.

The increased loan limit may increase demand in those neighborhoods.  With increased demand, expect home values to continue to rise.

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About the Author

Scott Schang

A 20 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

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