California REALTORS® Applaud FHFA for Raising Fannie Mae and Freddie Mac Conforming Loan Limits
The Federal Housing Finance Agency (FHFA) recently announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021. In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250, an increase from $510,400 in 2020. The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375—or 150 percent of $548,250.
"C.A.R. commends the FHFA for recognizing California's record-setting home price increases during this past year and raising maximum conforming loan limits, which will give tens of thousands of California homebuyers a chance at homeownership," said C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. "Increasing the existing Fannie Mae and Freddie Mac conforming loan limits will greatly benefit higher-priced areas of the state and provide stability and certainty to the housing market."
C.A.R. and the National Association of REALTORS® (NAR) both have long advocated for making higher conforming loan limits permanent. As a result of C.A.R.'s and NAR's efforts, cities with high median home prices have benefited from a loan limit above the national conforming loan limit.
The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or "guarantee." Non-conforming or "jumbo loans" typically have tighter underwriting standards and sometimes carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.