C.A.R. issued the following statement in response to the Federal Housing Finance Agency’s (FHFA) announcement to increase the 2018 conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac to $453,100 on one-unit properties and a cap of $679,650 in high-cost areas. The previous loan limits were $424,100 and $636,150, respectively.
“C.A.R. applauds the FHFA for recognizing California’s continuing home price increases over the last few years and raising maximum conforming loan limits,” said C.A.R. President Steve White. “Increasing the existing Fannie Mae and Freddie Mac conforming loan limits will provide stability and certainty to the housing market and give tens of thousands of California homebuyers a chance at homeownership.”
“With the average price of homes increasing steadily over the last few years raising the conforming loan amounts enables more potential buyers to engage in home ownership, reduces costs in many cases, and helps people stay within monthly payments they are acceptable to them” – Bill Facendini, President and Broker
C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) both have long advocated for making higher conforming loan limits permanent. As a result of C.A.R.’s and NAR’s efforts, cities with high median home prices have benefited from a loan limit above the national conforming loan limit.
“The increase in the GSE loan products reflects the continued increase in appreciation/housing values in all markets we serve. The increased conforming and jumbo loans will help Buyers/Borrows be more competitive in their offers against cash transactions and will allow more opportunity for first time home buyers. This is excellent news for the current housing landscape.” – Heidi Rickerd Rizzo, Vice President and Broker
The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically have tighter underwriting standards and carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.