Key Highlights

  • Federal Housing Finance Agency announced new conforming loan limit for Fannie Mae and Freddie Mac at $548,250 in 2021
  • Most counties increase +7.5%
  • 5th consecutive year of loan limit increases from FHFA

Conforming loan limits for Fannie Mae and Freddie Mac have increased quite a lot in the last five years. Back in 2016, the Federal Housing Finance Agency (FHFA), the overseeing policy umbrella for Fannie and Freddie, increased conforming loan limits for the first time in 10 years. Since 2016, the baseline loan limit has gone up $131,250.

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The conforming baseline loan limit is increasing +7.5% to $548,250 in 2021, the fifth consecutive year the FHFA has announced such increases.

Fannie and Freddie’s conforming loan limits are determined by the Housing and Economic Recovery Act of 2008 (HERA) that initially established the baseline loan limit at $417,000. Loan limits cannot increase during a period of market price declines; loan limits can only increase during a period when prices return to pre-decline levels. With home prices climbing to record highs during 2020, the FHFA is clearly within its bounds to increase the baseline conforming loan limit for Fannie and Freddie in 2021.

In high-cost areas (areas in which 115% of local median home value exceeds the baseline loan limit) where median home values generally increased in 2020, HERA set a ceiling of 150% of the baseline loan limit of $548,250. Therefore, the ceiling loan limit in most high-cost areas will be $822,375 or 150% of $548,250.

Different “special statutory provisions” apply to Alaska, Hawaii, Guam and the US Virgin Islands. In these states and territories, the baseline loan limit in 2021 will be $822,375 for one-unit properties.

Such increases in both baseline and ceiling loam limits will spur maximum 2021 conforming loan limits higher in all but 18 US counties

Click here for maximum conforming loan limits for all US counties in 2021…


Thanks to the Federal Housing Finance Administration and HousingWire.

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