The Federal Housing Finance Agency (FHFA) announced conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022, with the threshold for one-unit properties in much of the country at $647,200.
That’s up almost $99,000 from last year’s conforming loan limit of $548,250 — an unsurprising move as the FHFA is pushing the bar up to keep up with the surging prices seen for much of 2021. Many nonbank lenders, including United Wholesale Mortgage, Rocket Mortgage and PennyMac, raised their own conforming ceilings to the range of $620,000 or more this fall in anticipation of the FHFA’s official announcement.
The Housing and Economic Recovery Act requires the FHFA to adjust the baseline conforming loan limit for the government-sponsored enterprises each year to reflect changes in the average home price. Per the FHFA’s most recent seasonally adjusted numbers, U.S. home prices grew 18.05% year over year in third-quarter 2021, so the baseline limit is up by the same percentage.
In areas where 115% of the median home value exceeds the baseline limit — areas deemed “high cost” by the FHFA — the applicable loan limit is even higher. For these areas, the limit is set at $970,800, or 150% of $647,200. In Alaska, Hawaii, Guam and the U.S. Virgin Islands (each of which have different limits thanks to special statutory provisions), the applicable limit is $970,800 as well.