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New Conforming Loan Limits Set at $548,250 for 2021


What Does This Mean for You?

The Federal Housing Finance Committee (FHFA) just announced that in 2021, new limits for conforming loans will be set at $548,250 for most of the country, up from $510,000 in 2020. What does this mean for borrowers? You’ll have more buying power.

The FHFA oversees Fannie Mae and Freddie Mac; these entities are responsible for regulating mortgages (which includes setting the limits on home loans that conform to Fannie and Freddie criteria — known as “conforming home loans”). These limits are adjusted annually to account for changes in the average U.S. home price.

Conforming loans are seen as some of the most user-friendly for borrowers. Starting in 2021, these loans will be available for mortgages up to $548,250, which means you might be able to put less money down or purchase a bigger house without having to get what’s called a “Jumbo Loan” or a high-balance loan. Jumbo and high-balance loans tend to have stricter income underwriting, higher rates for smaller down payments, and specific requirements for the cash a borrower has in reserve. They can also take longer to close than conventional loans.

This will mark the 5th straight year of Fannie and Freddie raising mortgage loan limits — a stark contrast to the decade between 2006-2016 when this ceiling went unchanged. Increasing conforming loan limits is yet another indicator that home prices in the U.S. continue to be on the rise.


New conforming loan limit increase for 2021

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