The Federal Housing Finance Agency (FHFA) announced that the maximum baseline conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022 will be $647,200, an increase of $98,950 from $548,250 in 2021.
The Housing and Economic Recovery Act (HERA) requires that baseline conforming loan limits be adjusted each year to reflect the change in the average U.S. home price. The FHFA’s House Price Index report includes statistics for the increase in the average U.S. home value over the last four quarters. According to the recently released third quarter 2021 FHFA House Price Index report, house prices increased 18.05%, on average, between the third quarters of 2020 and 2021. Therefore, the baseline conforming loan limit will increase in 2022 by the same percentage.
For high-cost areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. Median home values increased significantly in high-cost areas in 2021, and the new ceiling loan limit for one-unit properties will be $970,800, which is 150% of $647,200.
Specialty statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In those areas, the baseline loan limit will be $970,800 for one-unit properties.
According to the FHFA, due to rising home values, the conforming loan limits will be higher in all but four U.S. counties or county equivalents in 2022. The FHFA House Price Index report found prices rose in all 50 states and the District of Columbia between the third quarters of 2020 and 2021 and rose in all of the top 100 metropolitan areas over the last four quarters.
The FHFA published several resources, including a list of 2022 conforming loan limits for all counties and county-equivalent areas and a map showing the 2022 conforming loan limits across the United States.