$417,000 is good for another year.
The Federal Housing Finance Agency (FHFA) today, Nov. 29, 2012, announced that the maximum conforming loan limits
for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In most of the country, the loan limit will be $417,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA), and are calculated each year.
HERA requires that the baseline loan limit be adjusted each year to reflect changes in the national average home price.
After a period of declining home prices, however, HERA requires that prior price declines be fully offset before a loan limit increase can occur. During the recent housing bust, the average U.S. home price declined substantially. While estimates vary, the FHFA monthly and quarterly HPI declined by more than 19 percent through mid 2011. Although FHFA’s monthly and quarterly HPI both evidenced price increases over the latest year, the magnitude of those increases was relatively small—only in the range of 4.0-4.4 percent. Because the latest year’s price increase did not fully offset the cumulative decline in prior years
, the national loan limit is left unchanged pursuant to the terms of HERA.
It’s nice to know at least one more factoid you don’t have to unlearn.