Finance a Higher Cost Home in 2022 With Increased Conforming Loan Limits

family buying a home with a conforming home loan

Good news for the nation’s homebuyers facing increased home prices. The Federal Housing Finance Agency (FHFA) has announced an 18.05% increase to the baseline conforming loan limit for Fannie Mae and Freddie Mac home loans financed in 2022 for nearly every U.S. county. Only four U.S. counties were not assigned the increased baseline loan limit.

As of 1 January 2022, the base conforming loan limit will increase by $98,950 to $647,200 for single family homes and one-unit properties. To purchase a home above this amount will require a Jumbo mortgage.

The increased loan limits may make it easier for both first-time buyers and current homeowners to buy a home. Homeowners can also refinance their current mortgage up to this new loan limit.

The new ceiling loan limit for one-unit properties in most high-cost areas will be $970,800, which is  150% of $647,200. The baseline loan limit for one-unit properties purchase in Alaska, Hawaii, Guam, and the U.S. Virgin Islands will also be $970,800.

Click here to see the new conforming loan limits for your county.

How does the FHFA determine the conforming loan limit?

The conforming loan limits for Fannie Mae and Freddie Mac are determined by the Housing and Economic Recovery Act of 2008, which established the baseline loan limit at $417,000. The Act mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. Today’s announcement marks the sixth consecutive year of increases from the FHFA.

For high-cost areas, where 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit is higher than the baseline loan limit. The Housing and Economic Recovery Act of 2008 established a maximum loan limit in those areas as a multiple of the area median home value while setting a “ceiling” on that limit of 150% of the baseline loan limit.


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