In 2022, the Federal Housing Finance Agency plans to raise the conforming loan limit for single-family home mortgages purchased by Fannie Mae and Freddie Mac to nearly $1 million in some areas to help homebuyers keep up with surging real estate prices, SmartAsset reports.
By increasing the conforming loan limit by 18.5%, the FHFA is helping buyers eliminate the need for a jumbo loan when purchasing homes in high-cost areas. The proposal would signal the largest single-year increase on record, fitting for a housing market with equally historic prices.
The Federal Housing Finance Agency will raise the conforming loan limit for single-family home mortgages purchased by Fannie Mae and Freddie Mac to approximately $650,000 in most parts of the country and nearly $1 million in high-cost areas like San Francisco, Seattle and New York, The Wall Street Journal reported.
According to the Federal Reserve Bank of St. Louis, the median home price in the U.S. increased nearly 20% over the last year, rising to $404,700 in the third quarter of 2021.
The Federal Housing Finance Agency is expected to raise the conforming loan limits by a whopping 18.5% in 2022, according to The Wall Street Journal. As a result, Fannie Mae and Freddie Mac would start backing mortgages of almost $1 million in certain high-cost areas, far above the current $822,375 limit in the priciest markets. The increase would be the largest single-year hike on record. While the potential move is aimed at helping homebuyers keep pace with rising home prices, it may also aid retirees looking to upsize into larger or more expensive homes.