New Conforming Loan Limits for 2022

What you need to know

Home values have been on the rise for a few years now, and while this is a benefit for homeowners and sellers, it isn’t the only good thing resulting from rising values. For buyers and sellers who have yet to refinance, those higher prices have increased loan limits. The baseline conforming loan limit is tied to national average home prices, and the loan limits are increasing for the fifth consecutive year.


Conforming loans remain a good option for buyers, because they usually offer lower interest rates compared to a non-conforming loan. There’s a good chance you’ll explore this type of loan if you are looking to buy a more expensive house and need to apply for a jumbo loan.


In fact, a surge in home prices during the pandemic is on track to fuel the biggest dollar increase in the conforming loan limit for Fannie Mae and Freddie Mac in 50 years. This increase in limit means more homebuyers will be able to apply for conforming mortgages instead of “jumbo” loans, which are typically harder to qualify for, and carry higher interest rates because they’re not backed by Fannie and Freddie.


Recent home price trends suggest that in terms of raw dollars, the conforming loan limit will make its biggest jump ever on January 1, 2022, increasing by more than $75,000. While the FHFA typically releases the conforming loan limit for the year ahead in November and will the upcoming conforming loan limit won’t officially be known until the third quarter, lenders who are offering loans of up to $625,000 seem to be reliable.


PennyMac Financial Services, a National Home Mortgage Lender, offered these conforming loan limits through the broker and correspondent channels:


  • One-unit properties: $625,000
  • Two-unit properties: $800,250
  • Three-unit properties: $967,250
  • Four-unit properties: $1,202,000


What does this mean for you?


For buyers, the rise in prices may be deterring, but it shouldn’t delay your home buying aspirations. The increased loan limits open the door for both first-time homebuyers and those looking to upgrade to a larger home.


Another reason to pay attention to the increased loan limit is that you will have an easier time affording a home of your own, with more much-needed flexibility. If you buy your forever home sooner than later, the higher conforming loan limits improve your chances of getting this home for less.


At Galaxy Lending Group, our mortgage consultants are experts in customizing a loan to meet your specific needs. Wherever you are in your home buying process, we’re with you every step of the way. Don’t put off your homebuying goals for another day, and apply today for a loan. Learn more about the Galaxy Difference, and contact us to begin your journey.