FHFA Announces 2022 Conforming Loan Limits
December 2, 2021 Government & Community Affairs, Industry News
Rising Home Prices Spur Tremendous Growth in Conventional Loan Limits
On Tuesday, the Federal Housing Finance Agency (FHFA) announced new conforming loan limits (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022.
In Barnstable County the new FHFA mortgage loan limit will be $647,200, an increase of $98,950 from the previous limit of $548,250 in 2021. Dukes and Nantucket counties are considered “high-cost” areas by FHFA and have loan limits 150% of the conventional limit. In 2022 the loan limit will be $970,800.
The new conventional loan limit is reflective of the FHFA price index increasing 18% between third quarter 2020 and 2021, thus raising the baseline for all loan limits nationwide.
“With the continuous rising of home prices, this will increase the buying power for buyers looking to make their home on Cape Cod, Martha’s Vineyard, and Nantucket. Fannie Mae and Freddie Mac are critical to a vital year round population across Cape Cod, Martha's Vineyard and Nantucket and to keeping liquidity in the housing finance world.” says CCIAOR CEO Ryan Castle.
The conventional loan limit is important as it is the maximum amount of money a lender can lend for a loan backed by Fannie Mae or Freddie Mac - which makes up a large portion of many bank’s portfolios. Any loan amount above that amount is subject to ‘jumbo’ financing and usually comes with higher down payments and more stringent approval requirements making them less accessible for many buyers.