New loan amounts.... What does that mean for you?

As 2017 is around the bend we have increased our loan limits on conforming and FHA loans! This is great news because you can buy more with less down. Could be a sign to come in the mortgage world. Conforming loan limits will increase from $417,000 to $424,000. Not a ton but everything helps. All of these loans that are $424,000 and below are sold on secondary market and the underlying guidelines are followed by Fannie Mae or Freddie Mac. If you go above $424,001 - the loans are sold to investors directly and they make their own guidelines which are usually more difficult - meaning - lesser debt ratios, more reserve requirements and higher FICO requirements. The big surprise was FHA increased to $421,100! This means you can buy a home for $439,400 and put 3.5% down and have all the flexibility of the FHA guidelines which are usually the most relaxed comparing to jumbo or conventional financing. If you are buying a duplex and going to owner occupy the property and rent out the other side - you can have a loan amount of 543,000 and buy a property of $562,000 and only put 3.5% down. That is pretty amazing. Regardless of your political beliefs... the new administration looks to be making lending open up a little. We will see but if more p[people can qualify for homes and the process is not so stringent the rates increasing may not put a damper on any home sales in 2017!