Fannie Mae (FNMA)

[navycmdr]

Baseline Conforming Loan Limit for GSEs will Remain at $417,000 Next Year

By Carisa Chappell [e-mail]

The baseline conforming loan limit for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 in 2016, according to an announcement by the Federal Housing Finance Agency on Wednesday. The agency said the average home value in the third quarter of 2015 still hasn't reached the level it was at in the third quarter of 2007.

In determining 2016 maximum loan limits, FHFA did not change the baseline maximum conforming loan limit of $417,000 because, according to the expanded-data House Price Index, national average home prices in the third quarter of 2015 remained approximately 3.7 percent below price levels in the third quarter of 2007, the FHFA said.

The Housing and Economic Recovery Act of 2008 mandated that the baseline loan limit can't increase until home prices rise above the levels they were before the recession. Loan limits in high-cost counties, based on median home values, can be set higher under HERA.

GSE loan limits will increase in 39 high-cost counties in six states in 2016, up to a maximum of $625,500.