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The\u00a0Federal Housing Finance Agency<\/strong>\u00a0announced a new baseline conforming loan limit for\u00a0Fannie Mae<\/strong>\u00a0and\u00a0Freddie Mac<\/strong>\u00a0in 2021: $548,250.<\/p>\n The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae<\/a> and Freddie Mac<\/a> in 2021. \u00a0In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250, an increase from $510,400 in 2020.\u00a0<\/p>\n Baseline limit High-cost area limits Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.\u00a0 In these areas, the baseline loan limit will be $822,375 for one-unit properties.<\/p>\n As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum CLL will be higher in 2021 in all but 18 counties or county equivalents in the U.S. \u00a0\u00a0<\/p>\n\n
<\/strong>The Housing and Economic Recovery Act (HERA) requires that the baseline CLL be adjusted each year for Fannie Mae<\/a> and Freddie Mac<\/a> to reflect the change in the average U.S. home price.\u00a0 Earlier today, FHFA published its third quarter 2020\u00a0FHFA House Price Index\u00ae<\/span><\/a>\u00a0(FHFA HPI\u00ae<\/span>) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.\u00a0 According to the seasonally adjusted, expanded-data FHFA HPI, house prices increased 7.42 percent, on average, between the third quarters of 2019 and 2020.\u00a0 Therefore, the baseline maximum CLL it in 2021 will increase by the same percentage.\u00a0<\/p>\n
<\/strong>For areas in which 115 percent of the local median home value exceeds the baseline CLL, the maximum loan limit will be higher than the baseline loan limit.\u00a0 HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a \u201cceiling” on that limit of 150 percent of the baseline loan limit.\u00a0 Median home values generally increased in high-cost areas in 2020, driving up the maximum loan limits in many areas.\u00a0 The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375 \u2014 or 150 percent of $548,250.\u00a0<\/p>\n\n