The Federal Housing Finance Agency (FHFA) is poised to increase mortgage loan limits for 2022, and in some places, those limits could approach $1 million.
The Wall Street Journal is reporting that the FHFA will increase loan limits backed by Fannie Mae and Freddie Mac to about $650,000 in most parts of the U.S. and to just under $1 million in high-cost markets. This will be the sixth year in a row that loan limits have increased, following the path of home price appreciation across the country.
"The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government," The Wall Street Journal wrote.
For the immediate DC area, and most other regions classified as "high-cost", the loan limits are currently $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 http://dc.urbanturf.com/articles/blog/us-poised-to-back-mortgages-of-nearly-1-million/18956
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