An 18% increase in the conforming loan limits for 2022 raised the baseline loan limit to $647,200 in most counties in the United States for a single unit.
The adjustment is a result of a change in the average price of a home nationwide from the third quarter of 2020 to the third quarter of 2021. Home prices increased an average of 18.05%, and the baseline conforming loan limit increased by the same amount.
Conforming loans may be cheaper than nonconforming loans like jumbo mortgages, but jumbo loans have their place.
Conforming Loan Limits for 2022
The conforming loan limits set by the Federal Housing Finance Agency can vary based on area and the number of units in the property.
In most counties, that number increased to $647,200 in 2022 for a one-unit property. In high-cost areas, the limit is $970,800 for a one-unit property.
In general, here’s how the baseline conforming loan limits break down for 2022.
|Units||Many counties in the contiguous states, District of Columbia, and Puerto Rico||Alaska, Hawaii, Guam, and the U.S. Virgin Islands|
Why Care About Conforming Loan Limits?
Staying under a conforming loan limit means you’ll most likely obtain a lower-cost mortgage. Mortgages that “conform” to the limits can be acquired by Fannie Mae and Freddie Mac, government-sponsored enterprises.
Because these mortgages can be bought by the agencies and then sold to investors on the secondary mortgage market, they represent a lower risk to the lender and a lower cost to the consumer.
If you need to finance more than the conforming limit, you’ll need to look at jumbo mortgage loans.
Getting a jumbo loan involves clearing more hurdles than a conforming loan, but the rate will usually be similar to conforming loan rates. How jumbo can a loan be for a primary residence, second home, or investment property? It’s up to each lender.
Government-backed mortgages are also nonconforming loans, and although they serve certain homebuyers, they also may be more expensive than conforming conventional loans because they usually come with additional fees.
Notable Counties Above the Standard Loan Limits
Loan limits are higher in counties where the average home price is above 115% of the local median home value. The loan ceiling is 150% of the baseline value.
For 2022, the high-cost-area loan limit increased from $822,375 to $970,800 on a one-unit property. Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have a baseline loan limit of $970,800.
The following is a chart of counties in high-cost areas with an increased baseline loan limit. The increased amount for high-cost areas is either maxed out at an 18% increase to $970,800 or the average percentage of increase for the price of a home in the area.
|State||County||2022 limit for a single unit||2021 limit for a single unit||% change year over year|
|California||Los Angeles County, San Benito, Santa Clara, Alameda, Contra Costa, Marin, Orange, San Francisco, San Mateo, Santa Cruz||$970,800||$822,375||18%|
|California||San Luis Obisbo||$805,000||$701,500||15%|
|Maryland||Calvert, Charles, Frederick, Montgomery, Prince George’s County||$970,800||$822,375||18%|
|Massachusetts||Essex, Middlesex, Norfolk, Plymouth, Suffolk||$770,500||$724,500||6%|
|New Hampshire||Rockingham, Strafford||$770,500||$724,500||6%|
|New Jersey||Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union||$970,800||$822,375||18%|
|New York||Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester||$970,800||$822,375||18%|
|New York||Dutchess, Orange||$726,525||$726,525||0%|
|Virginia||Arlington, Clarke, Culpeper, Fairfax, Fauguier, Loudon, Madison, Prince William, Rappahannock, Spotsylvania, Stafford, Warren, Alexandria, Fairfax City, Falls Church City, Fredericksburg City, Manassas City, Manassas Park City||$970,800||$822,375||18%|
|Washington||King, Pierce, Snohomish||$891,250||$776,250||15%|
|Washington D.C.||District of Columbia||$970,800||$822,375||18%|
|West Virginia||Jefferson County||$970,800||$822,375||18%|
Will Conforming Loan Limits Rise or Fall?
The baseline conforming loan limit is adjusted each year to reflect the change in the average home value in the United States.
The conforming loan limit has increased in six of the past 10 years and has never declined. From 2006 to 2016, for example, the conforming loan limit remained at $417,000, despite declining home values across the country. If home values continue to rise, the conforming loan limit will also rise.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Conforming Loan Limits Over the Past 10 Years
The 18% increase in loan limits is the largest jump in the past 40 years. It represents an increase of nearly $100,000 over the past year alone.
Conforming loan limits are intended to keep costs low for homebuyers. This means competitive pricing on mortgages, no matter what the housing market looks like each year.
If you’re looking to apply for a home mortgage loan, check out how SoFi can help. SoFi offers fixed-rate mortgages, and
qualifying first-time buyers can put as little as 3% down.
If a supersized loan is needed, SoFi offers jumbo loans with as little as 10% down and no private mortgage insurance.
Photo credit: iStock/marchmeena29
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