There are 50 states in the U.S., and 3007 counties in those states. (The numbers of counties per state ranges from the 3 in Delaware to 254 in Texas; Louisiana and Alaska have parishes – functionally equivalent.) Out of the 3,007 counties, 39 of them had their conforming loan limits increased by the Federal Housing Finance Administration (FHFA) – the overseer of Freddie Mac and Fannie Mae and the 11 Federal Home Loan Banks. For the remaining 2,968 the FHFA announced that the $417,000 baseline conforming loan limit for the GSEs would remain unchanged in 2016. As a result, the high-cost ceiling will remain $625,500 for 2016.
The FHFA increased the loan limits for 39 counties between 1% and 8% due to slightly higher median home prices in those areas. Most of them were in California, Colorado, Tennessee, Massachusetts, or New Hampshire.
So in most of the country the loan limit will remain at $417,000 for one-unit properties. For those of you, mostly in urban areas where markets are still “on fire”, hoping for a bump, remember the requirement that prior price declines be fully offset before a loan limit increase can occur. And prior price declines (remember 2006-2010?) haven’t been fully recouped. The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. The FHFA has determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007.
If you have any complaints or questions, send a note to LoanLimitQuestions@fhfa.gov