In what has become a common fall tradition, mortgage lenders increase their flexible loan limits months before the FHFA’s official announcement. on friday, Pennymac he joined Rocket Pro TPO in announcing an increase in their conforming loan limit to $802,650 – ahead of the expected increase FHFA in November. Pennymac’s increase will go into effect with a new merchant lockout on Monday, September 16.
“Pennymac is always looking for opportunities to help our partners and referral partners grow their business and stay competitive. Our capital position gives us the ability to fund these increased loans prior to agency support,” said Kim Nichols, TPO’s chief operating officer and senior managing director at Pennymac.
Alaska and Hawaii continue to see significant increases under new borrower guidelines, with a new loan limit of $1,203,975. The 2024 FHFA conforming loan limits are $766,550 in the lower 48 and $1,149,825 in Alaska and Hawaii. The new margin announced by Pennymac has increased by 4.71% this year. The FHFA will not announce its official borrowing limit for 2025 until November.
In 2008, in the wake of the Great Financial Crisis, the Housing and Economic Recovery Act (HERA) established a formula that mandated that the corresponding loan limit could be increased only after housing prices had returned to pre-recession levels. That situation was finally met in 2016 when the FHFA raised the consensus limits for the first time in a decade.
Here are the FHFA loan limit increases for single unit loans in the lower 48 states as of 2016.
- 2016: $417,000
- 2017: $424,100 – 1.7% increase
- 2018: $453,100 – 6.8% increase
- 2019: $484,350 — 6.8% increase
- 2020: $510,400 – 5.3% increase
- 2021: $548,250 — 7.4% increase
- 2022: $647,200 – 18% increase
- 2023: $726,200 — 12.2% increase
- 2024: $766,550 — 5.5% increase
The corresponding loan limit has increased by 50.1% since 2020, reflecting the large increase in house prices after the pandemic.
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