2022 CONFORMING LOAN LIMIT INCREASING TO $647,200

The Federal Housing Finance Agency (FHFA) announced today that conforming loan limits will increase up to $647,200 in 2022, an increase of 18% over 2021. The new limit applies to one-unit properties in most parts of the country. As a result, Finance of America Mortgage TPO is also increasing its conforming loan limit up to the same amount, and borrowers will have access to the higher limit beginning Dec. 6.

Additionally, high-cost areas of the country will also see higher-balance limits of nearly $1 million. High-cost areas are those in which 115% of the local median home value exceeds the baseline conforming loan limit. In those cases, borrowers will be able to access higher loan amounts with a conforming loan, up to a “ceiling” that’s equal to 150% of the baseline limit.

The new ceiling loan limit for one-unit homes in 2022 is $970,800, or 150% of $647,200.

The FHFA’s decision to increase conforming loan limits tracks the increase in the average U.S. home value over the last four quarters in the agency’s House Price Index (HPI) report. “According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 18.05%, on average, between the third quarters of 2020 and 2021. Therefore, the baseline CLL in 2022 will increase by the same percentage,” according to an FHFA press release.

The timing of higher loan limits comes as home prices continue to skyrocket. Home-price appreciation climbed 18% year over year in September – a record high, according to the latest CoreLogic Home Price Insights report.

Borrowers, particularly first-time homebuyers, are getting sidelined as home prices soar out of their reach, spurred by an ongoing inventory shortage. Providing access to higher conforming loan amounts ahead of the new year is one of many ways FAM is offering help – and hope – to borrowers in this competitive housing market.

If you have any questions, please reach out to your FAM TPO Account Executive.