With the New Year having arrived, there have been some drastic improvements to mortgage loan limits for Conventional Financing. Conventional financing includes both Conforming and High Balance loan limits, which are two separate loan buckets, but both contain very similar loan terms.
Loan limits are set by Fannie Mae and Freddie Mac and are the max loan amounts that the two agencies are willing to back and purchase from lenders, assuming the loan meets their underwriting guidelines.
Generally speaking, Fannie Mae and Freddie Mac mortgages provided the best interest rates on the market. If you go above their loan limits, you move into Jumbo Loan territory which could result in a more difficult loan underwriting to work through.
So what are the new loan limits? Effective January 1st 2019, the Conforming loan limit for a single unit home is $484,350 (up from $453,100 in 2018). The High Balance loan limit maxes out at $726,525 (up from $679,650), but varies from county to county. San Diego county’s High Balance loan limit for a single family residence is being set to $690,000 (up from $649,750).
The loan limits for a 2-unit residence (or duplex) are $620,200 for Conforming and $930,300 for High Balance loan limit. For a 3-unit residence (triplex), it is $749,659 for Conforming and $1,124,475 for the High Balance limit. And for a 4-unit residence it is $931,600 for Conforming and $1,397,400 for High Balance loan limit.
Don’t let all the numbers get confusing. With these loan limit increases, FHA and VA loan limits have also increased, which we can discuss separately. Give us a call at (760) 930-0560 and we will help you navigate through all the nuances of getting qualified for a mortgage.