As home prices across the country continue to rise, the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) have announced increases in conforming loan limits for 2017.<\/p>\n
For the first time since 2006, the FHFA has increased the maximum loan limit for conventional loans<\/a> through Fannie Mae and Freddie Mac from $417,000 to $424,100.<\/p>\n Related: 2019 Conventional Loan Limits in Michigan<\/a><\/p>\n Conforming loan limits for Fannie and Freddie are determined by the Housing & Economic Recovery Act of 2008, which requires that after a period of declining home prices, the baseline loan limit may not rise until home prices return to pre-decline levels. Until this year, average home prices remained below the level of those in the third quarter of 2007\u2014considered the pre-decline price level\u2014so the baseline remained the same. According to the FHFA, the Home Price Index (HPI) value for the third quarter of 2016 was approximately 1.7% above the value for the third quarter of 2007, meaning the baseline loan limit will increase as such.<\/p>\n Related: More about Conventional Mortgage Loan Limits<\/a> and FHA Mortgage Loan Limits<\/a><\/p>\n Less than a week later, the FHA announced a similar loan limit increase for a whopping 2,948 U.S. counties in 2017. Only 286 counties will remain at 2016 levels. Here in Michigan, the FHA conforming loan limit<\/a> will rise from $271,050 to $275,665. It will apply to cases assigned on or after January 1st, 2017.<\/p>\n These loan limit increases may seem marginal, but point to a better future. The FHFA and FHA recognize that home values across the nation have recovered, and have responded with an opportunity for homebuyers to increase their buying power.<\/p>\n Some financial institutions have speculated that this 1.7%, $10,000 increase to the conventional loan limit could lead to 40,000 additional originations with $20 billion in loan balances across the country.<\/p>\nConventional Loan Limits Increased<\/h2>\n
FHA Loan Limits Increased<\/h2>\n