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The FHFA (Federal Housing Finance Agency) announced the new 2022 loan limits for mortgages through Fannie Mae and Freddie Mac conforming loans. 

What are loan limits?

Conforming loan limits are a requirement from HERA (Housing and Economic Recovery Act) to ensure that government backed loans stay in line with current home values reflected in the past year. The 2022 conventional loan limit is $647,200.

The loan limits announcement sparked excitement through the mortgage industry as it reflected an increase of $98,950 over 2021 loan limits. This is a significant increase compared to last year when 2021 loan limits increased from $510,000 in 2020 to $548,250. 

The increase is a direct result of the sharp increase we have seen in home values over the past year. 

What does the loan limits increase mean?

When a home loan amount is over the conventional loan limits a borrower would need to get a Jumbo Loan. Jumbo loans are a great option in these scenarios but they typically leave the borrower with a higher interest rate.

Conventional loans are a better product with lower rates. Whenever possible a lender will work all the options to get the borrower into a conventional loan. Higher loan limits mean that more people can benefit from conventional loans. 

Increases in home prices throughout the Upper Valley make this change timely and beneficial to many people looking to buy a home. 

Additionally, anyone who currently has a jumbo loan product may be a good candidate to refinance with a conventional loan product. 

If you are looking to buy a home or refinance your current home, reach out to the Legacy Mortgage team. We will get to work finding the best loan product for you. Call us today, 603-643-7400.