In welcome news for home buyers, the Federal Housing Finance Agency (FHFA) has announced that the conforming loan limit for single-family homes in Philadelphia and surrounding counties will increase to $647,200 in 2022. Loans that exceed this conforming loan limit are referred to as jumbo loans or non-conforming loans and often carry a higher interest rate and have stricter qualification guidelines.

The increase is important because it allows buyers to spend more without needing a jumbo loan. The new limit is $98,950 more than the $548,250 limit in place for 2021—a substantial rise reflecting the run-up in prices over the last year.

If you’re planning to purchase a home with a mortgage exceeding $647,200, you might consider increasing your down payment to reduce the mortgage amount below the jumbo limit. If you do need to borrow more than $647,200, be sure to shop around, since rates and fees can vary among lenders.

The conforming loan limit plays an important role in the housing market. Banks and other lenders can sell their conforming mortgages to Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), freeing up cash to make additional loans to buyers. The limit is adjusted annually to reflect changes in housing prices.

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FOR EXPERT ADVICE buying or selling a home, contact Annette Nelson at (610) 247-7892 or annette@preferredhomes.com

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