In what has become a familiar fall ritual, mortgage lenders increase their conforming loan limits months before the FHFA’s official announcement. On Friday, Pennymac connected Rocket Pro TPO by announcing an increase in their conforming loan limit to $802,650 – ahead of the expected increase by the FHFA in November. Pennymac’s increase will take effect for new broker closes on Monday, September 16.
“Pennymac is always looking for opportunities to help our affiliates and their referral partners grow their business and stay competitive. Our capital position gives us the ability to support these higher loan amounts prior to agency support,” said Kim Nichols, Chief TPO Production Officer and senior managing director at Pennymac.
Alaska and Hawaii will still get a bigger increase under the lender’s new guidelines, with a new loan limit of $1,203,975. FHFA’s 2024 conforming loan limits are $766,550 for the bottom 48 and $1,149,825 for Alaska and Hawaii. The new threshold announced by Pennymac is an increase of 4.71% on this year. The FHFA will not announce this official conforming loan limit for 2025 until November.
In 2008, as a result of the major financial crisisthe Housing and Economic Recovery Act (HERA) established a formula that required the conforming loan limit to increase only after home prices returned to pre-recession levels. That requirement was finally met in 2016 when the FHFA raised the compliant limits for the first time in a decade.
Here are the increases to the FHFA conforming loan limit for single-unit loans for the lower 48 states since 2016.
- 2016: $417,000
- 2017: $424,100 – up 1.7%
- 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 conforming credit limit has increased by 50.1% since 2020, reflecting the sharp rise in home prices in the wake of the pandemic.
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