The Federal Housing Finance Agency (FHFA) has announced the conforming loan limits (CLLs) for any mortgages acquired by Fannie Mae and Freddie Mac in 2022.
Throughout most of the U.S., the 2022 CLL for one-unit properties will be $647,200—up $98,950 from $548,250 in 2021.
According to FHFA, the Housing and Economic Recovery Act (HERA) requires this baseline to be adjusted each year to reflect the change in the average U.S. home price. As house prices increased 18%, on average, between the third quarters of 2020 and 2021, according to the latest data from FHFA, the baseline CLL in 2022 will increase by the same percentage.
However, in areas where 115% of the local median home value exceeds the baseline limit, the loan limit will be higher. HERA establishes that limit, with a “ceiling” of 150% of the baseline limit. The new ceiling loan limit for one-unit properties will be $970,800, which is 150% of $647,200.
Some areas like Alaska, Hawaii, Guam and the U.S. Virgin Islands have special statutory provisions. In these areas, the baseline loan limit will be $970,800 for one-unit properties.
Due to rising home values, the CLLs will be higher in all but four U.S. counties or county equivalents.
“Earlier today, FHFA announced the Conforming Loan Limits for 2022. Compared to previous years, the 2022 Conforming Loan Limits represent a significant increase due to the historic house price appreciation over the last year. While 95% of U.S. counties will be subject to the new baseline limit of $647,200, approximately 100 counties will have conforming loan limits approaching $1 million. FHFA is actively evaluating the relationship between house price growth and conforming loan limits, particularly as they relate to creating affordable and sustainable homeownership opportunities across all communities,” said FHFA Acting Director Sandra L. Thompson in a statement.