In 2021, the maximum loan size for single-family homes owned by Fannie Mae and Freddie Mac will increase to $ 548,250 in most areas and to $ 822,375 in more expensive areas.
According to the Federal Office for Housing Financing, the basic credit limit reflects a seasonally adjusted increase in home prices of 7.42%. The FHFA is based on a comparison of the third quarter average versus the previous year. The base limit in 2020 was $ 510,400 based on a 5.38% increase in home prices.
The price increase shows the extent to which federal rescue programs and an imbalance between supply and demand have counteracted the economic pressure of the pandemic. The coronavirus was originally expected to put pressure on property values before these programs were implemented.
US house prices have increased quarterly since the third quarter of 2011 based on the FHFA's seasonally adjusted house price index, which reflects a more limited set of data than the one used to set the corresponding threshold. The baseline limit has increased by more than $ 100,000 over the past five years.
Regions where 115% of the local home average value exceeds the base conforming credit limit are generally considered high cost areas for the purposes of the Housing and Recreation Act. The upper limit for areas with high costs is 150% of the base credit limit.
Certain high credit limit counties are located in California, Florida, Idaho, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, North Carolina, Tennessee, Utah, Virginia, Washington, and Wyoming.
Alaska, Hawaii, Guam and the US Virgin Islands have different calculations due to special legal requirements. This year, the base credit limit corresponds to the maximum credit limit for high costs.
All but 18 counties or county equivalents in the United States will have higher highs next year.