For the second year in a row, the government regulatory body, the FHFA, has raised the conforming loan limits to try to reflect the rising appreciation in many markets across the country. The conforming loan limits will go from $424,100 in 2017 to $453,100 in 2018. This is a 6.8% increase.
Many will ask why this is a big deal? It's particularly important especially here in the Twin Cities where there are a lot of homes for sale priced between $450,000 - $500,000. What this does is that now homes priced at $499,900 are within reach for more buyers being able to purchase with only 10% down instead of 20% down to reach that cap on the conforming loan limits. (Technically, the price would need to be $498,410 to make a conforming loan work with 10% down). “This makes buying homes in the high $400k range and above, easier for many as they can avoid JUMBO financing and more rigorous guides” Mike Wright Strategic Mortgage Specialist with Fairway Independent Mortgage out of Edina, MN. In 2017, to do a 10% down conventional loan, the home price could be no higher than $466,510 because of the lower conforming loan limit.
All things being equal in the spring of 2018 as they have been in 2017, I expect we'll see further growth in transaction activity for half million dollar homes. This will be good news for some homeowners who have been in their homes for a while and would like to finally sell.
Author:John Murphy Phone: 763-443-9821 Dated: November 30th 2017 Views: 50 About John: John Murphy has been a licensed REALTOR since 2003 and a licensed broker since 2007. He is consisten...
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