The Federal Housing Finance Agency (FHFA) recently announced that the maximum baseline conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2021 will increase to $548,250 from $510,400.
This makes five consecutive years of increases and is great news because the higher loan limits allow a larger group of borrowers qualify for the loans backed by Fannie and Freddie. The jumbo loan programs have been significantly reduced by banks and lenders in recent months due to COVID/ economic challenges.
FHFA said that “as a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2021 in all but 18 counties or county equivalents in the U.S.” The loan limit will increase by 7% in 2021 because FHFA has determined that the average U.S. home value increased by that amount between the third quarters of 2019 and 2020.
Higher loan limits will be in effect in higher-cost areas as well. The new ceiling loan limit in high-cost markets will be $822,375. The previous loan limit in 2020 was $765,600.
Borrowers can use the handy map here to look up the conventional loan limit for their county.
| Units | Most States | Select High-Cost Areas |
| 1 | $548,250 | $822,375 |
| 2 | $702,000 | $1,053,000 |
| 3 | $848,500 | $1,272,750 |
| 4 | $1,054,500 | $1,581,750 |