The Federal Housing Finance Agency (FHFA) recently announced that it would increase mortgage loan limits in 2021 — for the fifth consecutive year.
With the increase, Fannie Mae and Freddie Mac will be able to acquire mortgages of up to $548,250 for a single dwelling unit, a 7.5% increase from $510,400 in 2020. Overall, the mortgage loan limit has increased by $131,250 since 2016, when it rose for the first time in a decade.
For the immediate DC area, and most other regions classified as "high-cost", the loan limits increased to $822,375 for a single dwelling unit, 150% higher than the nationwide maximum. The 2020 maximum was $765,600 in high-costs areas.
Government Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac guarantee many mortgages nationwide, often at lower costs and with more favorable lending terms. However, because they are legally bound to only accept loans of a certain amount, the increased loan limits make GSE loan underwriting more accessible to a larger pool of homebuyers.
This article originally published at https://dc.urbanturf.com/articles/blog/loan-limits-to-rise-in-dc-area-for-5th-straight-year/17583.
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