CHARLOTTE – Great news for consumers has been released as on November 29th, the federal housing finance agency has increased the conforming/conventional loan limits to $726,000 from the current $647,200. This means that borrowers can now borrower up to $726,000 using a first-time homebuyer program (min. down payment of 3%) or do a standard loan to that loan amount with only a 5% down payment. Prior to this news, if one was to purchase a home over with a loan over $647,200, they would have to do a JUMBO loan, which typically requires a min. 10-15% down payment and more scrutinized underwriting.
So, to recap, the loan just needs to be $726,000, meaning if one has a 5% down payment, they could purchase up to $765,000 using a standard loan now. This new conforming limit was set at this number by reflecting the average US home price, as home prices adjusted by an increase of 12.21 percent between the third quarters of 2021 and 2022 (expanded data provided by FHFA HPI).
Now one may ask, what about FHA loan limits? This is a loan that would allow borrowers to qualify with a 3.5% down payment, and sometimes lower credit score OR higher debt ratios. FHA is still limited to its $420,680, as of the moment, but typically this same data is furnished to FHA/HUD, in which they will make the adjustment shortly as well.
As soon as that adjustment is made, and announced, we will keep you updated! As always, if anyone has questions with anything mortgage related. Feel free to call/text/email (firstname.lastname@example.org / (704) 430-6138.