The Federal Housing Finance Agency has announced it is raising the 2022 conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac to $647,200 on one-unit properties. The conforming loan limit for high-cost areas, including San Mateo and Santa Clara counties, will increase to $970,800. The previous loan limits were $548,250 and $822,375, respectively.
The GSE conforming loan limits rose by 18.05 percent. This is the sixth straight year that the FHFA has increased the loan limits. The increase is effective January 1, 2022.
The FHFA's conforming loan limits define the maximum one-unit single-family mortgage amounts that government-sponsored enterprises Fannie Mae and Freddie Mac may finance or "guarantee." The conforming loan limits are also used to define the loan limits for the FHA's program. Non-conforming or "jumbo loans" typically have tighter underwriting standards and sometimes carry higher mortgage interest rates than conforming loans, thus increasing monthly payments and hampering the ability of families in high-cost states like California to purchase homes and making them less affordable.
"The California Association of Realtors and the National Association of Realtors have long advocated for loan limits to reflect an area's cost of housing. With high median home prices compared to other parts of the nation, homebuyers in our region and state benefit from a loan limit above the national conforming loan limit," said Joanne Fraser, president of the Silicon Valley Association of Realtors. "These mortgages acquired by Fannie Mae and Freddie Mac are guaranteed by the government. Homebuyers in California should have the same equal access to safe and affordable mortgages which the GSE's and FHA loans provide as any other state."
C.A.R. President Otto Catrina praised FHFA. "With California's home prices climbing so significantly during the pandemic, C.A.R. commends the FHFA for recognizing the record-setting home price increases and raising maximum conforming loan limits in high-cost markets to $970,800. If loan limits were not allowed to increase every year to keep up with home prices, first-time and moderate-income homebuyers across the state would not have access to affordable mortgage capital, which reduces homeownership opportunities for those who need it the most."
National Association of Realtors President Leslie Rouda Smith said in a statement, "With the continuous rising of home prices, the National Association of Realtors appreciates the FHFA resetting the national and high-cost conforming loan limits. Fannie Mae and Freddie Mac are critical to providing funding to the housing market as we've seen throughout the pandemic and decades before it. The FHFA's actions will continue to ensure liquidity for home purchase market."
NAR's latest existing home sales report showed the median existing home sales price increased 13.1 percent year-over-year to $353,900. According to C.A.R.'s October housing market report, the statewide median price of an existing single-family home was $798,440, up 12.3 percent from October 2020. Locally, MLSListings reports San Mateo County's October median home sales price of $1,915,000, increased 16.6 percent from October last year and Santa Clara County's October median price of $1,625,000 increased 13 percent.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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