By Matt Allen
Vice President, Portfolio Lending (NMLS #415037)

Conforming Loan Limits Increase for Fifth Straight Year in 2021

Nov 25, 2020

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The Federal Housing Finance Agency (FHFA) announced on Tuesday, November 24th, that the conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will be increasing 7.42% in 2021. The new maximum conforming loan limit (CLL) for one-unit properties for most of the U.S. will be $548,250, up from $510,400 in 2020. This will be the fifth straight year that the FHFA has increased the conforming loan limits.

This percentage increase follows the requirement of the Housing and Economic Recovery Act (HERA) that the baseline CLL be adjusted each year for Fannie Mae and Freddie Mac to follow along with the change in the average U.S. home price. According to the FHFA House Price Index® (FHFA HPI®) report which estimates the increase in the average U.S. home value over the last four quarters, the increase was 7.42%, thus the percentage increase to the CLL limit. Areas where 115% of the local median home values exceed the baseline CLL will have a higher baseline loan limit. This new limit, with a “ceiling” on that limit of 150% of the baseline loan limit, will be $822,375, or 150% of $548,250.

As a result of rising home values, the increase in the baseline loan amount, and the new ceiling loan amount, the maximum conforming loan limit will be higher in 2021 in all but 18 counties or their equivalents in the U.S.

If you’re looking to purchase a home in 2021, give the experts at NASB a call at 855-465-0753*.

*Loan must close after Jan 1, 2021 to receive new CLL.