Conventional Loan Limit Increases for 2017
As expected, Fannie Mae & Freddie Mac have announced that conventional loan limits are set to increase as of January 1, 2017. Since rate increases on these programs are tied to median home values, this increase was expected, and is finally some relief for people buying in higher price ranges. While not a drastic change, the increases will be helpful to people buying in higher-end areas of most markets.
For real estate agents, it's important to note that lenders may originate loans based on the new loan limits immediately, however loans with the new limits will not be able to close until January 1, 2017. Keep that in mind if going under contract on a home priced in a range that could be influenced by these loan amounts -- you could potentially save your clients several thousand dollars out of pocket by holding off on closing until January 1 or later if your clients are currently being held to a $417,000 or $625,500 loan amount.
This change is for conventional loans only. It is expected FHA loan limits will be increased as well as they typically mirror conventional products, however HUD loan limits are county-specific, so I'll announce those as soon as I see them for 2017.
This increase signifies a healthy market that has largely recovered nationwide from the 'Great Recession', and hopefully the increased limits will allow for healthy appreciation in the coming year.
If you have any questions or would like any more info about the increase to conventional loan limits for 2017 please don't hesitate to give me a call or ask an expert here.