FHFA Raises Conforming Loan Limits for 2022
Real Estate In-Depth | December 1, 2021
WASHINGTON—The Federal Housing Finance Agency (FHFA) today announced the conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2022. In most of the U.S., the 2022 CLL for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.
The market area of the Hudson Gateway Board of Realtors is considered by the FHFA as a high-cost area. Therefore, most of the counties in the region have new loan limits in excess of the new baseline of $647,500.
The loan limits for 2022 in the HGAR region will be:
New York County: $970,800;
Bronx County: $970,800;
Rockland County: $970,800;
Putnam County: $970,800;
Westchester County: $970,800;
Orange County: $726,525 and
Sullivan County: $647,200
Due to rising home values, the CLLs will be higher in all but four U.S. counties or county equivalents.
High-Cost Area Limits
For 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. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting a “ceiling” at 150% of the baseline limit. Median home values generally increased in high-cost areas in 2021, which increased their CLL. The new ceiling loan limit for one-unit properties will be $970,800, which is 150% of $647,200.
Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $970,800 for one-unit properties.
The Housing and Economic Recovery Act (HERA) requires that the baseline CLL for the Enterprises be adjusted each year to reflect the change in the average U.S. home price. On Nov. 30, FHFA published its third quarter 2021 FHFA House Price Index report, which includes statistics for the increase in the average U.S. home value over the last four quarters. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 18.05%, on average, between the third quarters of 2020 and 2021. Therefore, the baseline CLL in 2022 will increase by the same percentage.
House prices were up 4.2% compared to the second quarter of 2021. FHFA’s seasonally adjusted monthly index for September was up 0.9% from August.
“House price appreciation reached its highest historical level in the quarterly series,” said William Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “Compared to a year ago, annual gains have increased in every state and metro area. Real estate prices have risen exceptionally fast, but market momentum peaked in July as month-over-month gains have moderated.”
House prices rose in all 50 states and the District of Columbia between the third quarters of 2020 and 2021. The five states with the highest annual appreciation: 1) Idaho 35.8%; 2) Utah 30.3%; 3) Arizona 27.7%; 4) Montana 26.0% and 5) Florida 24.8%. The areas showing the lowest annual appreciation: 1) District of Columbia 8.0%; 2) North Dakota 10.5%; 3) Louisiana 10.9%; 4) Maryland 12.5% and 5) Iowa 13.0%.