Mortgage Update: New Loan Limits for 2018

New 2018 Mortgage Conforming Loan Limits

The Federal Housing Finance Agency (FHFA) is raising the baseline conforming loan limit for 2018, and we’re here to help you understand what this means! Laws restrict Fannie Mae and Freddie Mac to purchasing single-family mortgages with origination balance that are below a certain amount—this amount is known as the “conforming loan limit.” Read on for the reason behind this limit change, what these limits are in the Colorado counties we serve, and what the increase means for homebuyers.

Why has the limit been raised?

The limit increase is a response to significant gains in home values that occurred during 2017. According to FHFA, house prices increased 6.8 percent on average over the last four quarters. Therefore, the baseline maximum conforming loan limit will increase by the same percentage. In most counties across the country, the 2018 maximum conforming loan limit for a single-family home is $453,100. That’s an increase of $29,000 from the 2017 baseline limit of $424,100.

What it means in high-cost areas

High-cost areas are counties in which 115 percent of the local median home value exceeds the baseline conforming loan limit. In Colorado, that includes Boulder, Denver, Broomfield, Jefferson, Arapahoe, Douglas and Adams counties. In these areas, the loan limit is established as a multiple of the area median home value, while a “ceiling” of that limit is set at 150 percent of the baseline loan limit. That means the new ceiling loan limit in most high-cost areas for one-unit properties will be $679,650. Read on to see the limits in the Colorado counties we serve.

What it means for borrowers

Higher conforming loan limits are an “added value” to the consumer. It allows you to purchase a higher-priced home but keep your loan amount in a conforming loan limit that provides greater flexibility with underwriting guidelines and programs.

Below you’ll find a snapshot for the high balance conforming limit for one-unit properties in select counties.

What the new limits are in the Colorado counties we serve

Conforming New Limit One-Unit Property
All Counties (includes Larimer & Weld County) $453,100
Conforming – High Balance Limit One-Unit Property
Boulder County $578,450
Denver, Broomfield, Jefferson, Arapahoe, Douglas, & Adams County

$529,000

The conforming loan limit increased nationwide on January 1, 2018. Loans locked in December 2017, but closing in 2018 are eligible. If you have any questions, sign up for a consultation with one of our Loan Officers here.

Author Elizabeth Million

Boulder local Elizabeth Million shares advice on home buying and mortgages picked up from the diverse roles she’s served in the real estate industry, including appraisal business owner and mortgage loan officer for Fortune 500 companies. In her current role as VP of Mortgage Lending, Liz has led Elevations to the title of largest credit union mortgage lender in Colorado.

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