The Federal Housing Finance Agency announced new conforming loan limits for Fannie Mae and Freddie Mac for 2021. The new limit for single-family residential properties is $548,250, which is up nearly 7.5% from 2020’s limit of $510,400 and marks the fifth consecutive year of increases.
All counties in Washington states have increased to the new limit. However, only King, Pierce, and Snohomish counties in Washington are considered “high-cost counties” and have a higher limit of $776,250.
High-cost areas have 115% of the local median home value that exceeds the baseline conforming loan limit.
Click here to see a map of the new conforming loan limits across the U.S.
In 2016, the FHFA increased the Fannie and Freddie conforming loan limits for the first time in 10 years, and since then, the baseline loan limit has gone up by $131,250.
What does this mean for homebuyers?
Loan limit increases are significant for homebuyers! The increase keeps homebuyers in step with a more expensive housing market like Seattle, by allowing them to borrow more to the limit of what is called a “Conforming Loan”. With conforming loans, buyers can purchase homes with lower down payments and more competitive rates.
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