The Federal Housing Finance Agency (FHFA) has issued the Fannie Mae Loan Limits for 2020 that will apply to conventional loans to be acquired in 2020. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits. The limits are increasing in 2020.
Fannie Mae Loan Limits for 2020: First Mortgage Loan Limits
The following chart contains the general loan limits for 2020:
The high-cost area loan limits are established for each county (or equivalent) and are published on Fannie Mae’s website and on FHFA’s website. The maximum limits for 2020 are:
Application of the Limits Based on Original Loan Amount
All loan limits apply to the original loan amount of the mortgage loan, not to its balance at the time of purchase by Fannie Mae. Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located.
The new limits are effective for whole loans delivered, and mortgage loans delivered into MBS with pool issue dates, on or after January 1, 2020.
Whole loans delivered up through December 31, 2019, must comply with the 2019 limits. MBS pools with December 1, 2019 pool issue dates must comply with the 2019 limits, and MBS pools with January 1, 2020 pool issue dates must comply with the 2020 limits (even if delivered in December). Lenders must ensure the appropriate identification of high-balance loans at delivery using Special Feature Code 808.
High-cost area limits
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value while setting a “ceiling” on that limit of 150 percent of the baseline loan limit. Median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $765,600 — or 150 percent of $510,400.
Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $765,600 for one-unit properties.
As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county-equivalents in the U.S.
Questions about the 2020 conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov and more information is available at https://www.fhfa.gov/CLLs.
More details at FHFA.