The Federal Housing Finance Agency Announces New Higher Maximum Conforming Loan Limits in 2021 for Fannie Mae and Freddie Mac Mortgages

The Federal Housing Finance Agency (FHFA) announced on Tuesday (11/24) that 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 single-unit properties will be $548,250, an increase from the 2020 CLL of $510,400. The adjustment is the result of the Housing and Economic Recovery Act (HERA) which requires that the baseline CLL be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price. Earlier today, FHFA published its third quarter 2020 FHFA House Price Index® (FHFA HPI®) report, which includes estimates for the increase in the average U.S. home value over the last four quarters. According to the seasonally adjusted, expanded data FHFA HPI, house prices increased 7.42%, on average, between the third quarters of 2019 and 2020. Therefore, the baseline maximum CLL it in 2021 will increase by the same percentage. In high cost areas HERA has made provisions for higher than CLL maximum.

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FHFA Announces Conforming Loan Limits for 2021