Loan limits increase for 2017

For the first time since the housing crisis, Federal Housing Finance Agency (FHFA) has agreed to increase the maximum conforming loan limits for loans backed by Freddie Mac and Fannie Mae.  This is the first time since 2006 that the conforming limits have increased.  The new limit starting in January 2017 is $424,100.  The old limit of $417,000 had not changed for 10 years – it couldn't until home prices recovered to pre-crisis levels.

This is important as FHFA officials have claimed that the US housing market has remained "stuck".  Overall home prices have not risen past the levels of the 3rd quarter of 2007, the "official" pre-implosion level. However, the 3rd quarter of 2016 finally rose above those levels! The Home Price Index for the 3rd quarter of 2016 moved past the 3rd quarter of 2007, so loan limits could finally be raised.

VA also came out with increased loan limits to match Fannie and Freddie's limit of $424,100. With VA loans, you can go above the $424,100 but you can't finance 100% over that.  Once you go over $424,100 you need to make sure you have a 25% VA loan guarantee, from either the VA entitlement or down payment (or equity for refinances).

FHA also increased their loan limits. In the Minneapolis St Paul metro area, the new limit will be $332,350 as of January 1, 2017.  Non metro areas will be at $275,665. FHA increased their limits about $6000, so that will help many potential home owners.

The new limits may help those buying near the top of the conforming limits – if you stay under $424,100, it allows for easier underwriting – usually!  It also may help with lower interest rates.  The new FHA limits may help those that wanted to buy a larger home but for some reason could not use conventional financing.

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, AnEqual Housing Lender, NMLS#150953 - Email - Website

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

Weekly real estate market update 2/7/25… activity is on the rise, could a fixer-upper be for you?

🖨 Print Article New listings and multiple offers are on the rise in tandem. I can attest to that, as we reviewed 12 amazing offers on one of my new...

The Real Benefits of Buying a Home This Year

🖨 Print Article Have you been wondering whether you should keep renting or finally make the leap into homeownership? It’s a big decision, and let’s be real — renting can...

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!

This field is hidden when viewing the form

Blog Categories

Archives

Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.