The Federal Housing Finance Agency (FHFA) has responded to the robust housing market by announcing significantly increased conforming loan limits for the coming year. After already hiking the limits 2 times in the past 2 years, this FHFA move means more home buyers have access to affordable financing. In turn, this leads to lower rates, lower down payments and access to higher loan amounts.
Conforming loans, sometimes referred to as conventional loans, conform to the guidelines that have been established in the Fannie Mae and Freddie Mac programs. These loans are primarily designed for consumers who are in the market to purchase or refinance a primary residence, secondary residence, or rental property … virtually the entire marketplace.
Among the many beneficiaries of this new policy is potential homebuyers who are in the market for larger homes or housing units for rentals or investments. By increasing the amount of funds a borrower qualifies for in a conforming loan, the candidate is able to avoid applying for a jumbo loan instead. Jumbo loans are exactly what they sound like — lending programs for large amounts, outside the conforming loan limits. They come with higher down payment requirements, among other factors, so its in the buyer’s best interest to avoid using them if possible.
This Team Move/OVM Financial blog post offers more information and specific loan limit examples. If you are contemplating a new property purchase in 2018, this new year’s resolution from the feds qualifies as a nice “holiday gift.” The pros at Sanford’s Team Move office, are always happy to sit down, answer questions and help explore your best home funding options. Please call 919-777-0114 to set an appointment.