Loan Limits Jump to Keep Up with Rising Home Costs
On Tuesday Afternoon the Federal Financing Housing Agency announced the increased loan limits for Fannie Mae and Freddie Mac in 2019. This is the third consecutive year we have experienced an escalation to keep up with rising home costs. Starting January 1st the limit will be moved from $453,100 to $484,350, a $31,000 increase. According to the 2018 Housing Price Index home prices in the last year have gone up 6.9%.
So besides a lot of numbers and the obvious “Rising Prices” trigger, what does this mean to you? Let’s break it down!
Instead of using their full names let us refer to Fannie and Freddie by their most common nickname, “Conventional Loans”. When you qualify for a loan you are given options as to the type of loan you would like to receive: FHA, VA, Conventional, etc. Each come with their own guidelines, restrictions, down payments, and…you guessed it…limits. By increasing the limit of the loan, the buyer is able to purchase higher without having to qualify for a different type of loan with more restrictions and more hoops to jump through for both the Buyer and Seller.
While the Federal Housing Administration (FHA) hasn’t announced any news of an increase on their limits it is customary for them to follow the example of the Federal Financing Housing Agency, so only time will tell. However, 2019 is looking good for home values. The market is still projected to “even out” as we head into next year, but for now if you are looking to buy or sell, strike while the iron is hot! We are here to help 🙂