Dan Marchiando's Mortgage News Blog

Bigger Mortgage Loans Here

December 9th, 2022 2:10 PM by Dan Marchiando

Once again Conforming loan sizes have increased, as well as FHA and VA mortgage loans. Any loans bigger than these would generally be Jumbo loans.

The majority of mortgages originated in the U.S. for the past several years have been Conforming loans, which are loans underwritten to the standards of the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. If you have a mortgage, odds are it is Conforming Fannie or Freddie loan, even though you send your monthly payment to another institution (the loan servicer). FHA and VA (veteran) loans make up the next largest group of mortgage loans. Conforming, FHA, and VA loans have some of the lowest interest rates, amongst all mortgages available.

The federal agency FHFA limits the maximum loan sizes that Fannie and Freddie can purchase, and the max can change annually based on changes in median home prices. So as home values increase, these loan limits also increase.

The new maximum regular Conforming loan limit is now $726,200. This is an increase from 2022, when it was $647,200, 2021 when it was $548,250, and more than the flat $417,000 limit we had from 2006 through 2016. There are also separate higher Conforming loan limits for duplex, triplex and fourplex residential properties.

Fannie and Freddie are also allowed to buy some larger loans in high-cost areas like California. These are referred to as High-Balance or Super-Conforming loans, and the limits for these loans vary by county, and the interest rates on these loans are usually slightly higher than on regular Conforming loans. FHA and VA loan limits for our area generally mirror the larger Super-Conforming loan limits here, and generally have the lowest interest rates.

For Santa Barbara, the new Super-Conforming, FHA, and VA limit will be $805,000,

for Ventura, $948,750,

for San Luis Obispo, $911,950,

and for Los Angeles, $1,089,300.

For loan amounts greater than these, you’d need to consider a Jumbo mortgage.

You can’t take out a Conforming mortgage directly from Fannie Mae or Freddie Mac, or an FHA or VA mortgage directly from the FHA or VA, so why should you care about these big government-related agencies or programs? The main reasons are that these programs lead to lower interest rates and create more affordable financing options for the majority of Americans. They do this because of government mandates, and are able to do this because of their sheer size and efficiency, their superior technology, and their ability to survive big and small financial upsets like the Great Recession of 2008, and the more recent COVID pandemic.

If you have questions about your existing mortgage, are considering a new mortgage, or just have questions about your credit report, please don't hesitate to call or email me.

As always, thanks for your interest,

Dan Marchiando
 Mortgage Loan Specialist

 Office: (805) 899-1390 x105
 Cell: (805) 886-0581
Posted by Dan Marchiando on December 9th, 2022 2:10 PM