Conforming loan limits to remain unchanged in 2014
The Federal Housing Finance Agency announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for one-unit properties in most areas of the country.
Amounts greater than $417,000 are known as jumbo mortgages.
The Housing and Economic Recovery Act of 2008 establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions, in addition to requiring annual adjustments to the limits to reflect changes in the national average home price.
The FHFA announced in late summer that it would consider rolling back the limits to a lower level for the coming year as another step in reducing Fannie and Freddie’s influence in the mortgage market and encouraging greater participation by the private sector. The proposed move was met with protest from industry groups and others who sent letters both to FHFA and toCongress protesting any downward revisions as potentially harmful to homebuyers, refinancers, and the housing market recovery.
Loan limits are changed each year according to a formula which takes into account median prices in local areas. The limits have been unchanged for several years because of emergency regulations put in place in response to the housing crisis.