Are you house hunting and ready to purchase a home in 2018? We’ve got great news!
For the second year in a row, and the second time since 2006, the FHFA is increasing the conforming loan limits for Fannie and Freddie in 2018. The FHFA just announced that they will be increasing the conforming loan limits from $424,100 to $453,100 for 2018.
These conforming loan limits for Freddie and Fannie are determined by the Housing and Economic Recovery Act of 2008. This established the loan limit at $417,000 and required that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. This last year, FHFA finally increased the loan limit to $424,100.
The FHFA’s third quarter 2017 House Price Index report, which includes estimates for the increase in the average U.S. home value over the last four quarters, showed that house prices increased 6.8%, on average, between the third quarters of 2016 and 2017. Since home prices are on the rise, FHFA announced today that the maximum conforming loan limit in 2018 will increase by the same percentage – from $424,100 to $453,100. FHFA noted that with this increase in home prices, its necessary to have a second straight yearly increase in the conforming loan limit.
In what the FHFA calls “high cost areas”, the loan limits will also increase. In certain areas, the cost of living is more expensive and requires a loan limit above the general. The new ceiling loan limit for one-unit properties in the majority of high-cost areas will be $679,650 (which is 150% of $453,100) for one-unit properties in the contiguous U.S. To learn more about this increase click here.
If you want to see the conforming loan limits for your county, click here!
This is a huge increase and great news for new home buyers ready to purchase in 2018! If you’ve been on the fence about buying a home, this is a great opportunity you don’t want to pass up!
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