More Purchase Power For Homebuyers With New Conforming Loan Limits


New increases on conforming loan limits mean that you can expect to afford more for less when you begin shopping for a home. That’s because now you no longer need complex loan products, larger down payments, and the burden of stricter qualifications when financing a higher-priced home.


The changes were handed down by Fannie Mae (FNMA) and Freddie Mac (FHLMC) and took effect at the beginning of 2022 in response to the rising home prices in many parts of the country. To better understand this change, we need to look at the previous alternative to buying a high-end home and the pricing details of the new loan limit.


Using a jumbo loan vs. a conventional loan

When shopping for a home, there are a number of factors that limit your choices, such as location, size and cost. Getting a home with a value beyond the amount allowed by a conventional loan means you would have to get niche loan products, such as a jumbo loan. As the name suggests, a jumbo loan will cover a more significant price tag. However, it also requires more from buyers.


Jumbo loans often require a better credit score than conventional lending, with many lenders only qualifying customers if they have a score of 700 or above. In addition, your debt-to-income ratio (your monthly debt obligations compared to your monthly income) should be ideal by 36% with most lenders. The DTI number may vary between 43% to 45% max for conventional loans.


The changes in a new conforming loan limits

The Fannie Mae (FNMA) and Freddie Mac (FHLMC) increase to loan limits is around $548k to $625K in most areas for 2022. For anyone thinking about becoming a homebuyer, currently looking at homes, or interested in refinancing, this increase means they can afford to dream a little bigger.


FNMA and FHLMC dictate the maximum amount of money homeowners may borrow under standard loan limits as federally backed mortgage institutions. The new 2022 conforming loan limits apply specifically to:

  • 1-unit single-family homes (including condos)
  • 2–4-unit properties allowed with a new limit between $800,250 (2-unit) and $1,202,000 (4-unit)
  • Purchases and refinances
  • Owner-occupied, second homes, and investment properties


Homebuyers may finance bigger goals with this new maximum amount while saving money with today’s historically low interest rates!


Contact a Homebridge Mortgage Loan Originator in your area for more information.

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