FHFA Increases the Conforming Loan Limit

According to a press release from the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac will increase the conforming loan limit to $453,100 in 2018, up from $424,100 in 2017. This increase mirrors the recently released seasonally adjusted, expanded-data Housing Price Index, which rose by 6.8% on average between the third quarters of 2016 and 2017. For high-cost areas—areas where 115 percent of the local median home value exceeds the baseline conforming loan limit of $453,100—the ceiling will be $679,650 (150 percent of $453,100). The release notes that the maximum conforming loan limit will be higher in 2018 in all but 71 counties in the U.S. 

SFIG supports a better balance between private and public capital in the mortgage market and, as such, maintains that the best approach for the FHFA to foster increased private participation is through PLS issuance. Therefore SFIG supports a decrease in the conforming loan limits below their maximum threshold.

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