Conforming Loan Limit to Go Up Next Year

Beginning in 2019, Fannie Mae and Freddie Mac will increase their conforming loan limit by 6.9%, matching the percentage increase in average home values nationwide. In most of the country, the limit will be $484,350, higher in more expensive areas.

Besides conforming loans, there are also jumbo loans — those that do not conform to this limit. While these are currently cheaper than conforming loans, it’s much easier to qualify for a conforming loan. And the difference in price isn’t much, on average: an annual rate of 5.01% on conforming and 4.9% on jumbo mortgages. However, in more expensive areas, such as California’s Bay Area, 39.5% of loans were jumbo loans in September, as a result of a median price of $815,000. The new limit of $726,525 for them still won’t reach the median with the minimum down payment of 5%, but Fannie Mae and Freddie Mac hope to take that percentage down.


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