There are no plans to lower the conforming loan limit, or the maximum value for the loans that Fannie Mae and Freddie Mac will buy and guarantee, said Bill Pulte, director of the Federal Housing Finance Agency (FHFA), which oversees the two mortgage giants.
In an interview with CNBC, Pulte clarified that he would not lower the conforming loan limit, which is calculated each year based on current home prices. It now stands at $806,500, an increase of $39,950 or 5.2% from 2024.
“There are no plans to do anything as it relates to the conforming loan limit,” Pulte said.
CNBC reports that in the process of reducing the size of the federal government, the Trump administration was expected to try to shrink the size of government-sponsored enterprises Fannie Mae and Freddie Mac, the largest players in the mortgage industry and guarantors of the majority of the nation’s $12 trillion mortgage market.
Eric Hagen, managing director and mortgage finance analyst at BTIG, told CNBC that a reduction in loan limits would appease those that are irritated that the government is insuring million-dollar mortgages when private companies could perform that role. He said, however, that private mortgage providers would have to increase interest rates for jumbo mortgage loans.
The FHFA has held Fannie and Freddie in a conservatorship since 2008. The Trump administration has made clear it is interested in privatizing the two mortgage companies. Pulte, who was confirmed as director of the FHFA on March 13, is expected to lead the push to privatize Fannie and Freddie. And as part of that process, many thought Pulte would lower the maximum value for loans the two companies can buy and guarantee.
