$726,200 is The New Fannie Mae Loan Limits For 2023

The Federal Housing Finance Agency announced that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $726,200.

Freddie Mac & Fannie Mae Loan Limits 2023

In most of the U.S., the 2023 maximum conforming loan limit will be raised to $726,200, up from 2020’s level of 510,400. 2023 is the seventh straight year that the FHFA has increased the conforming loan limits after not raising them for an entire decade from 2006 to 2016.

In 2016, the FHFA increased the Fannie and Freddie conforming loan limit for the first time in a decade, and since then, the loan limit has gone up by $93,400.

In 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the following year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019. 2020 saw loan limits go from $484,350 to $510,400. And now, loan limits will top out at $726,200.

The conforming loan limits for Fannie Mae and Freddie Mac are determined by the Housing and Economic Recovery Act of 2008 (HERA), which established the baseline loan limit at $726,200 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels.

Fannie Mae Condo Mortgages, Single Family Residences, Townhouses, and PUD's all follow the same limits as above. 2-4 Unit Properties have their own limits which can be viewed on the Fannie Mae Website here.

Data from FHFA shows that home prices have increased by 5.38% on average between the third quarter of 2018 and the third quarter of 2019. Therefore, the baseline maximum conforming loan limit in 2020 will increase by the same percentage. The increase in home prices reflects their growth in value.

For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value while also setting a “ceiling” on that limit of 150% of the baseline loan limit.

Median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many of those areas.

The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375 — or 150% of $625,000.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $822,375 for each one-unit property.

The result of generally rising home values, and the increase in the baseline loan limit, in addition to the rise in the ceiling loan limit, the maximum conforming loan limit will be higher in 2023 in all but 43 counties or county-equivalents in the U.S. Refer to this map of those maximum loan limits nationally.

Conclusion

As we wrap up this comprehensive guide on the New Fannie Mae Loan Limits for 2023, it's crucial to understand how these changes can significantly impact your mortgage options and eligibility. Whether you're in the contiguous states or specific regions like Alaska and Hawaii, these loan limits set by the Federal Housing Finance Agency (FHFA) offer a roadmap for your homebuying journey.

It's worth noting that these loan amounts are not just confined to Fannie Mae; they also extend to Freddie Mac, making it essential for borrowers to stay updated with lender letters and announcements. High-cost areas have their own set of rules, and understanding the county loan limits can make a huge difference in your mortgage borrowing experience.

For those residing or looking to invest in Florida, it's also vital to be aware of the Florida FHA Loan Limits, which differ from the Fannie Mae and Freddie Mac limits. Being knowledgeable about these can offer you a broader range of mortgage options.

Additionally, when considering your financing options, the debate between FHA Vs Conventional Loans often comes into play. Understanding the nuances between these two types of loans can further assist you in making the most informed decision.

In summary, whether you're navigating the conforming loan limits of 2023, exploring options like Florida FHA Loan Limits, or weighing the pros and cons of FHA Vs Conventional Loans, staying ahead with the latest updates in housing finance can help you make informed decisions and achieve your homeownership goals.

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Philip Bennett

Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners, Bus. NMLS # 2046828. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.

Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.

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