Baseline Conforming Loan Limit Will Increase to $726,200
Washington, D.C.– The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values(CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022.
National Baseline
The Housing and Economic Recovery Act (HERA) requires that the baseline CLL for the Enterprises be adjusted each year to reflect the change in the average U.S. home price.Earlier today, FHFA published its third quarter 2022FHFA House Price Index®(FHFA HPI®)report, which includes statistics for the increase in the average U.S. home value over the last four quarters.According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 12.21 percent, on average, between the third quarters of 2021 and 2022. Therefore, the baseline CLL in 2023 will increase by the same percentage.
High-Cost Areas
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2022, which increased their CLL. The new ceiling loan limit for one-unit properties will be $1,089,300, which is 150 percent of $726,200.
Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $1,089,300 for one-unit properties.
Due to rising home values, the CLLs will be higher in all but two U.S. counties or county equivalents.
Other Resources
- List of conforming loan limitsfor all counties and county-equivalent areas in the U.S.
- Amap showing the conforming loan limitsacross the U.S.
- Detailed addendum of themethodology used to determine the conforming loan limits.
- List ofFAQsthat covers broader topics that may be related to CLLs.
- Questions about the CLLs can be addressed toLoanLimitQuestions@fhfa.gov.For more information, visithttps://www.fhfa.gov/CLL.
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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $8.1 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter,@FHFA,YouTube,Facebook, andLinkedIn.
Contacts: AdamRussellAdam.Russell@FHFA.gov
I am an expert in the field of housing finance and mortgage regulations, with a demonstrated depth of knowledge in the workings of institutions like Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency (FHFA). My expertise extends to the intricacies of conforming loan limits (CLLs) and the factors influencing their adjustments.
The recent announcement by the FHFA regarding the increase in the baseline conforming loan limit to $726,200 for one-unit properties in 2023 is a significant development. This adjustment, as mandated by the Housing and Economic Recovery Act (HERA), is based on changes in the average U.S. home prices.
The evidence supporting this increase lies in the FHFA House Price Index® (FHFA HPI®) report for the third quarter of 2022. According to this report, the average U.S. home value experienced a 12.21 percent increase between the third quarters of 2021 and 2022. This percentage serves as the basis for the corresponding increase in the baseline CLL for 2023.
High-cost areas, where the local median home value exceeds 115 percent of the baseline conforming loan limit, have their loan limits adjusted accordingly. In such regions, the applicable loan limit can go up to 150 percent of the baseline limit. The new ceiling loan limit for one-unit properties in these areas will be $1,089,300.
The methodology for determining conforming loan limits is detailed in an addendum provided by the FHFA. Additionally, the FHFA offers resources such as a list of conforming loan limits for all U.S. counties, an interactive map illustrating these limits, and a FAQ section covering broader topics related to CLLs.
It's noteworthy that special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the baseline loan limit for one-unit properties will be $1,089,300 due to rising home values.
For those seeking further clarification or information, the FHFA has provided a contact email (LoanLimitQuestions@fhfa.gov) and a dedicated webpage ().
In conclusion, the adjustment of conforming loan limits is a nuanced process influenced by the HERA, supported by comprehensive data on home prices, and administered by the FHFA to ensure the stability and functionality of the U.S. mortgage markets.
