Realtors say raising limits will give more homebuyers access to affordable mortgages
The California Association of Realtors (CAR) has welcomed the Federal Housing Finance Agency's decision to increase the 2020 conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac. The loan limits will increase to $510,400 from $484,350 on one-unit properties and $765,600 from $726,525 in high-cost areas.
The conforming loan limit determines the maximum size of a mortgage that Fannie and Freddie can buy or “guarantee.” Non-conforming “jumbo loans” typically have tighter underwriting standards and sometimes carry higher mortgage interest rates than conforming loans, increasing monthly payments.
CAR has long advocated for higher conforming loan limits, arguing that the previous caps were “hampering the ability of families in California to purchase homes by making them less affordable.”
“CAR commends the FHFA for increasing the 2020 loan limits for loans insured by Fannie Mae and Freddie Mac,” said Jeanne Radsick, president of CAR. “The new loan limits recognize California's and the nation's rising home prices and will ensure more home buyers have access to safe and affordable mortgages. These increases keep the cost of borrowing manageable for many California homebuyers and will help improve housing affordability across the state. We hope the FHFA will continue to look for ways to increase homeownership opportunities across all housing markets, including high-cost areas.”