New Conforming Loan Limits set for 2020
Matthew Benidt – VP of Retail Banking; SafeAmerica Credit Union
On December 3rd, the Federal Housing Finance Agency (FHFA) announced that it is raising conforming loan limits for Fannie Mae and Freddie Mac in 2020 to a baseline of $510,400 for one-unit properties in most counties across the United States, an increase from 2019’s level of $484,350.
Why was the limit raised?
Laws presently restrict the purchase of loans by Fannie Mae and Freddie Mac to loans with origination balances below the conforming loan limit. According to the FHFA’s data, housing prices increased 5.38% on average, between the third quarters of 2018 and 2019 and the conforming loan limits need to rise in order to allow home buyers to borrow enough to cover the cost of their new home purchase.
What does this mean for you?
In high-cost areas, the maximum FHFA loan limits are set higher than the baseline. As the cost of living in the Bay Area is higher than in other parts of the country, the majority of the area that SafeAmerica Credit Union serves is subject to a higher limit—with a “ceiling” set at 150% of the baseline conforming loan limit. This higher limit allows borrowers obtaining a mortgage loan within the conforming loan limit to benefit from the many standards and criteria set by Fannie Mae and Freddie Mac to help make sustainable homeownership possible for more people.
Loans with origination balances above the conforming loan limit, often called jumbo mortgages are impacted by the new loan limits only in that the minimum amount to be considered a jumbo mortgage has now increased and jumbo mortgages continue to be available, at lenders like SafeAmerica.
2020 Conforming loan limits by county:
| County | FHFA One-Unit Conforming Loan Limit |
| Alameda | $765,600 |
| Contra Costa | $765,600 |
| San Mateo | $765,600 |
| Santa Clara | $765,600 |
| San Joaquin | $510,400 |
Conforming loan limits by county where SafeAmerica Credit Union has a presence
Financial experts always recommend working with a qualified mortgage lender like SafeAmerica during the homebuying process. SafeAmerica Credit Union offers a variety of both conforming and jumbo mortgage loan options and specialists are available in-branch or over the phone to discuss your individual situation.
