2019 Loan Limits Going Up

Fannie Mae and Freddie Mac have increased conventional loan limits for 2019: Explained

I am sure by now you have seen at least a few social media posts about loan limits going up. They basically say new loan limits for 2019. I am here to give you the full low down so next time you see a
picture that says “higher loan limits yay” you are a pro.

2019 Loan Limits

What higher loan limits mean?

  1. For first time home buyers across the county they can now qualify for a loan up to $484,350 with 3% down. In 2018 the 3% down was maxed at $453,100.  $31,250 may not seem like a big deal but as we watch home prices inch higher and higher this will help more people get into homes with limited down payments which is a good thing.  Rents have increased to the level where in many parts of the country rent is higher then a mortgage payment.
  2. Conventional loans are easier to qualify for and higher loan limits means loans that were once jumbo will be conventional. Yes, it is really that simple.  Jumbo loans have more restrictive guidelines such as reserve requirements, credit scores and in some cases rental history. In areas like San Francisco, Seattle and New York where the new limit is $726,525, on a loan of that amount, we can now do 5% down on a 30 year fixed which is a option that does not exist in jumbo world.  It would have had to be an adjustable rate mortgage.  Giving the people ability to get in at higher amounts with low down payments and fixed rate options is good.
  3. Higher loan limits are a reflection of the real estate market.  It is a positive trend across the country which means the Real Estate market is doing well and is healthy.

What if in 2020 loan limits did not go up?

This would be a red flag the real estate market was heading for a decline and had hit the peak. Whenever you see anything halt or get more restrictive alarm bells are ringing.

 

Overall why should you care?

If you are a buyer this gives you more loan options depending on your price point.

If you are a Realtor this should help more clients get into homes.

If you are a homeowner, the market is still trending up.

 

To see your County limit, check out:

https://www.fhfa.gov/DataTools/Downloads/Documents/Conforming-Loan-Limits/FullCountyLoanLimitList2019_HERA-BASED_FINAL_FLAT.pdf

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