Conforming Loan Limits Stay Put for 2014, Including High Cost Areas

Whether because of the uproar from some members of Congress, the Mortgage Bankers Association, National Association of Realtors, and other industry players or not, Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA) has left loan limits for Fannie Mae and Freddie Mac unchanged for the coming year. In a press release on Tuesday DeMarco said that the maximum conforming loan limits for mortgages acquired or guaranteed by the two government sponsored enterprises (GSEs) will remain at $417,000 for one-unit properties in most areas of the country.

Some high costs areas such as Washington, DC, New York, Boston, and large parts of California are exempt from the $417,000 ceiling with limits that range as high as $625,000. This upper limit is also unchanged. It is possible there are areas that have previous fallen into the jumbo mortgage category between the two loan limits that may now be capped at the national limit or have experienced some changes in maximums depending on local calculations.

DeMarco had announced in late summer that he would roll back the limits to a lower level for the coming year as another step in reducing the influence of the GSEs in the mortgage market and encouraging greater participation by the private sector. The industry groups above and others sent letters both to FHFA and to Congress protesting any downward revisions as potentially harmful to homebuyers, refinancers, and the housing market recovery.

Loan limits are changed each year according to a formula which takes into account median prices in local areas. The limits have been unchanged for several years because of emergency regulations put in place in response to the housing crisis and changes that lower limits are usually the province of Congress.

A link to a spreadsheet with a county by county breakdown of the new limits is available at www.FHFA.gov.

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