Loan Limits Raised

Mortgage

FHFA Raises 2017 Conforming Loan Limits for Fannie, Freddie

The Federal Housing Finance Agency increased the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2017. The limit for one-unit properties will rise to $424,100 from $417,000 in most of the country, the first increase in the baseline loan limit since 2006. The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit of $417,000 and requires this limit to be adjusted each year once the average U.S. home price returned to its pre-decline level. The FHFA’s House Price Index for the third quarter rose 1.5 percent from the previous quarter and registered a 1.7 percent rise from the third quarter of 2007. ICBA recognizes that while an increase in the conforming loan amount will help make conforming mortgage financing more widely available, it remains concerned that Fannie and Freddie are severely undercapitalized. The association is calling on FHFA Director Mel Watt to require the GSEs to develop and implement a capital restoration plan as required by HERA.  --ABA Daily Newsbytes