As featured on Urban Turf
A few years ago, the question was whether or when the government would lower the limits on mortgage loans backed by Fannie Mae and Freddie Mac. Now, the Federal Housing Finance Agency (FHFA) is set to increase the limits next year.
Currently, the loan limit in most counties nationwide is at $417,000; as of next year, it will rise to $424,100 — the first time the limit has been raised since 2006. The previous increase was much more dramatic, as the 2006 baseline was $359,650.
Fannie Mae and Freddie Mac are Government Sponsored Enterprises (GSEs) charged with guaranteeing a great portion of mortgages in the country, often at lower costs and more favorable lending terms. The increased loan limits will enable those GSEs to underwrite loans for more homeowners, who have seen housing costs bounce back demonstrably since the market crashed in 2009.
In some “high cost” counties, such as those in the DC metro area, the loan limit is already higher than what is typical nationwide and will increase from $625,500 to $636,150.