2023 Conforming Loan Limits Reach Record Levels
New 2023 loan limits for conforming mortgages will be $726,200 and exceed $1 million in higher-cost areas like Hawaii. The Federal Housing Finance Agency (FHFA) recently announced these conforming loan limit amounts for mortgages to be acquired by Fannie Mae and Freddie Mac.
The 2023 baseline conforming loan limit of $726,200 is up $79,000 from this year’s limit of $647,200. In higher-cost areas, the loan limit is $1,089,300, or up to 150% of the baseline national loan limit. This year’s loan limit in high-cost areas is $970,800.
High-Cost Area Limits
Loan limits are tied to average U.S. home prices, and 2021 and 2022 featured price increases at record levels. In the third quarters of 2021 and 2022, home prices jumped 12.21%, requiring 2023 baseline loan limits to increase by the same percentage, according to the FHFA. In Hawaii, the highest median sales price in 2022 for a single-family home was recorded at $1,153,500 in May.
2023 conforming loan limits are available by clicking here.
Benefits of Higher Loan Limits
-Lower Monthly Payment and Overall Loan Costs: Purchasing a home with a conforming loan versus a higher-cost jumbo loan can lower your borrowing costs. Conforming loans generally have better interest rates, lower costs, and flexible down payment, credit and qualification guidelines.
-Increased Purchasing Power: Apply for a larger loan to buy a better home with a remodeled kitchen, extra bedroom, more space, or in a preferred location.
-Tap into more equity with a cash-out refinance to pay down debt, cover college tuition, or make home improvements.
-Refinance: If you have a jumbo loan with a balance near a new loan limit in your area, you may benefit by refinancing to a conforming loan.
Ready to Discuss Your Mortgage Options?
If you’re considering a new home purchase or refinance, reach out to our seasoned mortgage advisors to discuss your loan options. Call 804-404-2202 or request a no-obligation consultation online.