Most of the loans done in the United States end up with Fannie Mae, Freddie Mac, or The Federal Housing Administration (FHA). All three agencies have Maximum Loan Limits, meaning that regardless of someone’s qualification there is a cap on the loan amount. Over the last few days all three announced increases to those limits. This year those increases were rather large due to the huge home appreciation rates the industry has seen.
There are two buckets for the caps that vary by area of the country. Most of the areas we serve in Michigan and Ohio are considered low costs areas. The low cost areas were increased as follows:
Property Size | Baseline Loan Limits |
One-Unit | $647,200 |
Two-Units | $828,700 |
Three-Units | $1,001,650 |
Four-Units | $1,244.850 |
Property Size | Low-Cost Area “Floor” |
One-Unit | $420,680 |
Two-Units | $538,650 |
Three-Units | $651,050 |
Four-Units | $809,150 |
This is all great news for home buyers and sellers. For buyers looking in that higher end market they are now able to reach some higher price points without needing “jumbo” financing. Typically with jumbo loans they have less attractive financing terms and more strict qualifying guidelines. These welcomed increases are bound to help keep that higher end market moving. If you have questions or need help with financing your next home don’t hesitate to reach out!
The real estate market has seen dramatic shifts in recent years, transitioning from a seller’s market during the pandemic to a more balanced landscape. As we move forward, understanding these changes is crucial for both buyers and sellers.
The Pandemic Boom:
During the pandemic, the real estate market experienced unprecedented demand. Low-interest rates and remote work trends fueled a surge in home buying, creating a highly competitive seller’s market. Home prices soared, and bidding wars became commonplace.