For nearly 10 years now, the loan limits apply to loans delivered to Fannie Mae will increase for the first time since 2006. All but 87 counties will see a loan limit increase as of January 1, 2017.
For the standard loan, it will increase from $417,000-$424,100 and for high balance loans or jumbo loans, it will increase to $636,150.
This is for conforming loan limits. Conforming loan limit means the limit on the size of a mortgage which Fannie Mae and Freddie Mac will purchase and/or guarantee. This limit is set by Fannie Mae’s and Freddie Mac’s federal regulator. They use the October to October percentage increase/decrease in the average house price in the monthly interest rate survey of the Federal Housing Finance Board in order to adjust the conforming loan limits for the subsequent year. Any mortgage that exceeds the general loan limit are known as jumbo mortgages. Interest rates on jumbo mortgages can be higher than on conforming mortgages. [Investopedia]
This is for single unit detached properties. Conventional loan amounts for duplexes, triplex’s and quadra-plexes will go even higher. For a two-unit property the loan amount will increase to $543,000 and $814,500 for high balance loans; for a three-unit property it will increase to $656,350 and $984,525 for high balance loan, and for a four-unit property it will be $815,650 and $1,223,475 for a high balance loan. Alaska, Guam, Hawaii and the US Virgin Islands will have different limits. The loan limit applies based on the original loan amount, not the unpaid principal balance.
The Federal Housing Finance Agency or FHFA, will raise this conventional conforming maximum loan limit by January 1, 2017. The agencies jumbo or high balance loan limit will also increase, which has not increased since 2009. Jumbo rates tend to be about one-quarter percent higher than standard conforming rates.
High-cost areas like Orange and Los Angeles County will see the higher increase up to $636,150. Most places like Riverside and San Bernardino counties will see the standard conforming increase of $424,100. FHA loan limits or even lower starting at just $356,500 for a one-unit property.
Read more about Loan Limits for Orange County. Go shop and do your due-diligence so you feel good at the end of the closing. Here are links to reach out to couple of lenders Brian Beres NMLS 14210 and Nick Williams NMLS 213359.
The cost does account for higher income and higher market areas like Orange County. For more information on this great new limit increase contact me anytime. Planning on buying in 2017? Start preparing now.