California Mortgage News

Newly Increased Conforming Loan Limits for 2018: The Federal Housing Finance Agency (FHFA) recently announced new conforming loans limits for 2018, marking the second, and consecutive, increase since 2006. The increased loan limits are for conforming loans sold through Fannie Mae and Freddie Mac, with individual loan limits for 1 to 4-unit properties broken out on a county-by-county basis. The maximum “true” conforming limit has been increased from $424,100 to $453,100 for all California counties. Counties meeting the definition of “high-cost areas” will have increased “high balance” loan limits of up to $679,650, an increase of $43,500 over the 2017 maximum high balance limit of $636,150. Updated limits for FHA insured loans to 96.5% financing and VA loans with 100% financing have also been released. (Note: in addition to 100% financing, the VA guarantees support much larger loans and purchases with small down payments.)

Loans exceeding a given county’s high balance conforming limit are deemed “jumbo” and typically have far more demanding underwriting requirements. Conforming loans sold through Fannie Mae and Freddie Mac are far more liberal with respect to loan-to-value and debt-to-income ratios, as well as credit scores and asset requirements. For example, true conforming loans are offered with down payments as low as 3% and the high balance product (now $679,650 in most Bay Area counties and Los Angeles) will support a 95% financed purchase of $715,421.

Below is a breakdown of new 2018 conforming loan limits for some of California's more active counties. For “High Cost Areas” the maximum high balance conforming limit is offered; for areas not deemed “High Cost”, the newly increased true conforming limit of $453,100 is listed.

For loan limits on all California counties:  www.ballardloans.com/2018loanlimits

Posted by Nicholas Ballard on January 12th, 2018 5:11 PM

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