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Conventional loan limits increase 2017

Conventional Loan Limits Increase in 2017

Increased for Most

UPDATE:  See California 2017 FHA loan limits

UPDATE:  See California 2017 Conventional loan limits

UPDATE:  See California 2017 VA loan limits

The Federal Housing Finance Agency (FHFA) announced on November 23rd, 2016 that conventional loan limits are increasing across the Country in 2017.

First mortgage limits are defined as either standard loan limits, which is what most of the Country will use, or high-cost loan limits.

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High-cost area loan limits are derived from median home prices estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD).

This is the first conventional loan limit increase since 2006.

2017 Standard Conventional Loan Limits

Units New Loan Limit
1 Unit $424,100
2 Units $543,000
3 Units $656,350
4 Units $815,650

2017 High-Balance Conventional Loan Limits

Units New Loan Limit
1 Unit $636,150
2 Units $814,500
3 Units $984,525
4 Units $1,223,475

Who Benefits from Higher Loan Limits?

The increase of conventional loan limits will mostly help first time buyers avoid having to use a Jumbo loan in areas of the Country where home prices continue to rise.

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In California, a good example of this would be areas of San Bernardino and Riverside Counties.  These are very large Counties with a lot of rural areas.

The home prices in the rural areas make FHA loan limits too low to use to buy a home in the higher cost areas of the County.  Increasing the conventional loan limits offers more options to buyers in these areas.

In high balance Counties, this increase is more reflective of the average home prices in these areas.  Again, the increase will allow buyers or owners in these high cost Counties the ability to take advantage of conventional financing guidelines.

If you were previously outside of the conventional loan limits and unable to meet strict Jumbo debt to income ratios, or increase reserve requirements, then this is great news for you!

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Check with your local lender to see how if the increase in conventional loan limits may affect your ability to buy, or refinance in your State or County.

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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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