WASHINGTON—Effective in 2022, home buyers in high-cost areas of the country will be able to borrow close to $1 million for a mortgage loan backed by the government.
The increase reflects the rapid appreciation in home prices nationally.
The new maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac will increase to $970,800 in high-cost markets such as California and New York, an increase from $822,375 this year, according to the Federal Housing Finance Agency, which oversees the two government-sponsored enterprises.
For most parts of the country, loan limits will rise to $647,200 from a 2021 maximum of $548,250, the FHFA added.
Sandra Thompson, the acting head of the FHFA, said in a statement Tuesday that the agency is evaluating the relationship between home-price growth and the annual loan limits, “particularly as they relate to creating affordable and sustainable homeownership opportunities across all communities.”
Under federal law, the loan limits are updated annually using a formula that factors in average housing-price increases nationwide.
As CUToday.info has reported, nationally the median single-family, existing-home sales price rose 16% in the third quarter to $363,700 from a year before, a record in data going back to 1968, the National Association of Realtors announced.