FHFA Announces 2022 Conforming Loan Limits
Written By: Joel Palmer, Op-Ed Writer
The rise in home values over the past two years is pushing conforming loan limits (CLLs) up nearly $100,000 for 2022.
The Federal Housing Finance Agency (FHFA) announced that CLLs for next year in most of the U.S. for one-unit properties will be $647,200, an increase from $548,250 in 2021.
The Housing and Economic Recovery Act (HERA) requires that the baseline CLL for mortgages to be acquired by Fannie Mae and Freddie Mac be adjusted each year to reflect the change in the average U.S. home price. FHFA’s recently published House Price Index report showed that average home prices increased just over 18 percent between the third quarters of 2020 and 2021. The baseline CLL will increase by the same percentage for 2022.
“House price appreciation reached its highest historical level in the quarterly series,” said William Doerner, Ph.D., supervisory economist in FHFA’s Division of Research and Statistics. “Compared to a year ago, annual gains have increased in every state and metro area. Real estate prices have risen exceptionally fast, but market momentum peaked in July as month-over-month gains have moderated.”
The five states with the highest annual appreciation were:
Idaho 35.8 percent
Utah 30.3 percent
Arizona 27.7 percent
Montana 26.0 percent
Florida 24.8 percent
The areas showing the lowest annual appreciation were:
District of Columbia 8.0 percent
North Dakota 10.5 percent
Louisiana 10.9 percent
Maryland 12.5 percent
Iowa 13.0 percent.
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting a "ceiling" at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2021, which increased their CLL. The new ceiling loan limit for one-unit properties will be $970,800, 150 percent of $647,200.
CLLs will be higher in all but four U.S. counties or county equivalents next year.
One-unit CLLs will be above the baseline limit in the following areas next year:
Sacramento, California ($675,050)
Santa Rosa, California ($764,750)
Santa Barbara County, California ($783,150)
San Luis Obispo County, California ($805,000)
Ventura County, California ($851,000)
Monterey County, California ($854,450)
San Diego, California ($879,750)
Napa, California ($897,000)
San Francisco, California ($970,800)
San Jose, California ($970,800)
Los Angeles, California ($970,800)
Steamboat Springs, Colorado ($678,500)
Denver, Colorado ($684,250)
Boulder, Colorado ($747,500)
San Miguel County, Colorado ($756,700)
Breckenridge, Colorado ($822,375)
Glenwood Springs, Colorado ($856,750)
Edwards, Colorado ($862,500)
Bridgeport, Connecticut ($695,750)
Washington, D.C. ($970,800)
Hailey, Idaho ($648,600)
Key West, Florida ($710,700)
Boston, Massachusetts ($770,500)
Poughkeepsie, New York ($726,525)
New York City ($970,800)
Nashville, Tennessee ($694,600)
Heber, Utah ($970,800)
Seattle, Washington ($891,250)
Jackson, Wyoming ($970,800)
Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $970,800 for one-unit properties.
The baseline CLL for two-unit properties in most of the country will be $828,700 next year. It will be $1,001,650 for three-unit properties and $1,244,850 for four-unit properties.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
