I know this is not the most riveting material to most, but I always write a blog “What’s Trending in Lending…” for the upcoming year. And here we are- 2018 is afoot. Loans are the biggest piece of the puzzle when moving in for the first time, moving up, or investing, so this blog has significance! I just wanted to make sure everyone was informed- we are still in an advantageous position to borrow money for real estate purchases and 2018 could even be better than the year before!

In 2018, we will see an increase in mortgage loan limits- great news for homeowners and homebuyers! This is a true economic indicator that the housing market is in full recovery mode, and in the Denver Metro area in particular, we know it is full steam ahead! On November 28, 2017, the Federal Housing Finance Agency (FHFA) increased the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac to $453,100. This is a 6.8% increase from 2017’s loan limits.

The high balance loan limit for the Denver metro area is now $529,000 and Boulder County is $578,450. Additionally, loan limits will be increasing in what the FHFA calls “high-cost areas,” where 115% of the local median home value exceeds the baseline loan limit. These limits will increase to $679,650 from $636,150. These limits are for one-unit properties.

Remember 2008- TEN Years Ago?

The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act (HERA) of 2008, which establishes baseline loan limits and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. But, as the FHFA noted, home prices are on the rise, which necessitates an increase in the conforming loan limit.

FHA Loans

FHA has announced their limits will also increase in 2018.

2018 Nationwide Forward Mortgage Limits
For low cost areas these are:

 

    • One-unit: $294,515

 

    • Two-unit: $377,075

 

    • Three-unit: $455,800

 

    • Four-unit: $566,425

 

For high cost areas limits will be:

 

    • One-unit: $679,650

 

    • Two-unit: $870,225

 

    • Three-unit: $1,051,875

 

    • Four-unit: $1,307,175

 

 

VA Loans

Use this link to view the VA announcement.

The Veterans Administration has announced that its loan limits for 2018 will follow those recently published by the Federal Housing Finance Agency for conforming loans. The VA uses FHFA’s limits to determine the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment.

For 2018, the maximum conforming loan limit established by the FHFA for mortgages acquired by Fannie Mae and Freddie Mac for one-unit properties will be $453,100 for most of the United States, an increase from the limit of $424,100 that was in effect for 2017.

For high-cost areas, the new ceiling loan limit for one-unit properties will be $679,650, but loan limits may be higher in some specific locations in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.

New Tax Law Changes

And, if you’re curious about the effects of the new tax law changes on real estate (we believe none), visit this blog that Colorado Home Realty’s managing broker authored:

https://coloradohomerealty.com/proposed-tax-reforms-not-harmful-for-real-estate/