Increasing Loan Limits

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by Gianni Cerretani, Sr. Mortgage Loan Originator

Homebridge Financial Services

I am excited to announce that Fannie Mae, Freddie Mac and Ginny Mae (HUD-FHA) have all announced that they will allow higher loan amounts for 2020. The VA has expressed that they will be changing their loan limits as well but have not come out with any concrete guidance as to what that will be. Stay tuned next month as I am sure we will have more information about the VA loan as we roll into 2020.

The announcement of increasing loan amounts is very exciting for multiple reasons. It allows home buyers the ability to finance more home without jumping into a jumbo loan program, which is a completely different animal when it comes to qualifications. Jumbo loan programs do come with higher risk to the investor, so generally rates are not as aggressive and you are required to put more down, have more assets in reserves and require lower debt ratios with higher credit scores. The conforming conventional loan program and FHA loan programs have and always will continue to be the backbone of the purchase market with low down payment options and the ability to work with less than perfect credit and higher debt ratios.

The conforming or conventional loan limits for FNMA and FHLMC new single-family homes has jumped from $484,350 to $510,400, that is a $26,050 increase to the loan size. Now this may not seem like a big difference but going from the 400Ks to the 500Ks is a huge price point difference in the real estate world, so it will make a huge impact on buyers’ abilities to purchase larger homes with more aggressive financing. For more information pertaining to detailed explanations on this federal announcement please visit https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2020.aspx. These changes have gone into immediate effect and can be utilized today!

The HUD-FHA has just announced that loan limits for GNMA new single-family homes are increasing as well. These changes are a piggy back off the conforming loan limit increases. HUD loan limits vary from state to state and county to county, but overall it appears that the loan limit for single-family loans for most of Metro Atlanta has increased from $379,500 to $401,350, which is a $21,850 jump. If you want to check out a specific state and or county, please visit https://entp.hud.gov/idapp/html/hicostlook.cfm. It will take you directly to the HUD portal to look up each loan limit by state and county. These changes will not go into effect until January 1, 2020.

This is all positive news for the housing market. The increase in loan limits shows that our housing market is finally starting to crawl out from underneath the rock it has been under since the crash of 2008. Hopefully this will excite the younger generations to look at home ownership as the American Dream it has always been in this country and not the nightmare that plagued our economy back more than 11 years ago. If you would like more information about these topics or anything else, please contact me directly at (404) 213-9663 or email me at gcerretani@homebridge.com.

Have a safe and happy holiday season and a happy new year!

Gianni Cerretani, a/k/a “The Mortgage Godfather,” is a Sr. Mortgage Loan Originator with Homebridge Financial Services. NMLS # 787898

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