The Federal Housing Finance Agency (FHFA) has issued new
conforming loan limits for 2021. In most of the country—including Philadelphia
and surrounding suburbs—the upper limit for conforming loans for one-unit
properties will rise to $548,250 from $510,400. In certain high-priced markets,
the upper limit for 2021 will be $822,375.
The conforming loan limit is important in the housing market,
because banks and other lenders can sell their conforming mortgages (those below
the loan limit) to the Federal National Mortgage Association (Fannie Mae) and Federal
Home Loan Mortgage Corporation (Freddie Mac), freeing up cash to make additional
loans. The conforming loan limit is adjusted annually, and the latest change reflects
the general rise in housing prices.
Loans exceeding the conforming loan limit are referred to as
jumbo loans or non-conforming loans.
Jumbo loans may carry a higher interest rate
and may also have stricter qualification guidelines. If you’re planning to purchase
a home with a mortgage of more than $548,250, you can increase your down payment
to lower your mortgage amount below the conforming limit or shop around for the
best deal on a jumbo loan.
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See more of Annette’s articles on
related real estate topics. If you’re planning
to buy or sell a home, contact Annette at (610) 247-7892 or annette@preferredhomes.com
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