As autumn approaches, mortgage lenders are once again raising their conforming loan limits well ahead of the official announcement from the FHFA. Rocket Pro TPO and Pennymac recently declared an increase in their conforming loan limits to $802,650, beating the anticipated rise by the FHFA in November. Rocket’s new limit is already in effect, while Pennymac’s will be effective for new broker locks starting September 16.
Alaska and Hawaii are seeing even bigger increases under the lenders’ new guidelines, with a new loan limit of $1,203,975. The FHFA’s conforming loan limits for 2025 are $766,550 for the lower 48 states and $1,149,825 for Alaska and Hawaii. This increase announced by the lenders represents a 4.71% jump over this year’s limit. The FHFA will not release its official conforming loan limit for 2025 until November.
Following the 2007-2008 financial crisis, the Housing and Economic Recovery Act (HERA) put in place a formula that required the conforming loan limit to only increase once home prices had returned to pre-recession levels. This condition was finally met in 2016 when the FHFA raised the conforming limits for the first time in ten years.
Here is a breakdown of the increases in FHFA’s conforming loan limit for one-unit loans in the lower 48 states since 2016.
- 2016: $417,000
- 2017: $424,100 — 1.7% increase
- 2018: $453,100 — 6.8% increase
- 2019: $484,350 — 6.8% increase
- 2020: $510,400 — 5.3% increase
- 2021: $548,250 — 7.4% increase
- 2022: $647,200 — 18% increase
- 2023: $726,200 — 12.2% increase
- 2024: $766,550 — 5.5% increase
The conforming loan limit has surged by 50.1% since 2020, reflecting the significant rise in home prices following the pandemic.
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