The FHFA announced that for 2017, it is increasing the conforming loan limit from $417,000 to $424,100 for single-family homes. This is the first increase since 2006! Great for the housing market!
What is a CONFORMING LOAN? A conforming home loan is one that meets, or "conforms" to certain guidelines set forth by Freddie Mac and Fannie Mae. These are two government-sponsored enterprises (GSEs) that purchase mortgages, bundle and securitize them, and then sell them to investors through Wall Street and other Channels. There are various criteria used to define a "conforming" mortgage product. But the size of the loan is one of the most important criteria, from a borrower's perspective.
JUMBO Mortgages are still Widely Available - Borrowers who wish to obtain a mortgage loan in any amount that exceeds the 2017 conforming limits ($424,100) still have options. When a home loan exceed the caps set by the Federal Housing Finance Agency, it is referred to as a "jumbo" mortgage product, and it cannot be sold to Fannie Mac or Freddie Mae. Jumbo loans are still widely available in the U.S., but the qualification criteria are generally more strict for these products due to the higher level of risk involved.