2018 Conforming Loan Limits and Why Elastic Waistband Pants Should be in Your Closet

The FHFA Raises Conforming Loan Limits from $424,100 to $453,100

Elastic waistbands are a staple around the winter holiday season. They offer a little give for that extra piece of pie, and won’t judge you when you take home the leftover dessert from your work’s holiday party.

Just like your waistband, U.S. home values expand and contract. Every year around the Thanksgiving holiday, the Federal Housing Finance Authority (FHFA) publishes their third quarter House Price Index (HPI) report, which includes estimates for the increase to the U.S. median home value over the last four quarters (usually Q3 to Q3). Essentially, the FHFA measures the amount U.S. homes have appreciated over the past 12-month period.

Based on the HPI report, the FHFA will use the results, whether up, down or no change, to recommend an adjustment to the conforming loan limits. This is a corrective measure to ensure conforming loan amounts keep pace with home appreciation.

According to the FHFA’s 2018 seasonally adjusted expanded-data HPI report, home prices in the U.S. increased on average by 6.8% from the third quarter of 2016 to the third quarter of 2017. As a result, the baseline maximum conforming loan limit in 2018 will increase 6.8% from $424,100 to $453,100.

Why This Matters to Potential Home Buyers…

Just as those elastic waistband pants offer a little bit of expansion for that second piece of pie, the 2018 loan limit increase provides an expansion to your conforming loan amount potential. In other words, the 2018 loan limit increase allows Lenders to lend more money to qualified buyers within the conforming classification.

So…

If you were home shopping this past summer and everything was too expensive for you to qualify for using a conforming loan – contact your local Land Home Mortgage Representative and ask them to take a second look at your loan application. The loan limit change may potentially increase the amount you can borrow and turn that “No” into “Yes-Approved!”.

And for folks still trying to decide if homeownership is the right move; now is a great time to schedule a no-cost, hassle-free homeownership check-in with a local Land Home Mortgage Representative.

Say “Yes!” to second helpings, and say “Yes!” to homeownership!

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