Yesterday, the Federal Housing Finance Agency (FHFA) announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. For most of the country, the loan limit will be $417,000 for one-unit properties.
The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA) and are calculated each year. The law sets loan limits as a function of median home values in local areas. While some counties saw increases in home prices in 2012, no loan limit increases were evident after other HERA terms such as the statutory ceiling and floor were taken into account, FHFA explained.
The maximum conforming loan limits for one-unit properties—which have applied to loans originated since October 1, 2011—are $417,000 in most locations but as high as $625,500 in certain high-cost markets. A list of the 2013 maximum conforming loan limits for all counties and county-equivalent areas is available on FHFA’s website.
For loans originated prior to October 2011, the maximum loan limit was raised to as much as $729,750 in high-cost areas-that’s when FHFA and the administration opted to lift the ceiling for loans the GSEs were allowed to purchase to compensate for tight credit conditions and a virtually non-existent private investor market during the housing crisis. That higher limit was permitted under legislation that is not applicable to loans originated in 2013.