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FHFA's 2022 Conforming Loan Limit Maxes Out At Nearly $1M

David Krechevsky
Dec 01, 2021
New FHFA Logo.

Baseline limit for Fannie, Freddie increases to $647,200, but for 'high-cost areas' loan ceiling set at $970,800 for single-family homes.

KEY TAKEAWAYS
  • In most of the United States, the 2022 conforming loan limit for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.
  • he new ceiling loan limit for one-unit properties will be $970,800, which is 150% of $647,200.

The Federal Housing Finance Agency (FHFA) has announced the conforming loan limits (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022, with the maximum limit for one-unit properties — single-family homes — approaching $1 million.

In most of the United States, the 2022 conforming loan limit for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.

The Housing and Economic Recovery Act (HERA) requires the baseline CLL for Fannie & Freddie (the Enterprises) to be adjusted each year to reflect the change in the average U.S. home price. Monday, FHFA published its third-quarter 2021 FHFA House Price Index (FHFA HPI) report, which includes statistics for the increase in the average U.S. home value over the last four quarters.

According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices nationwide increased 18.05%, on average, between the third quarters of 2020 and 2021, FHFA said. The baseline CLL in 2022 will increase by the same percentage, it said.

However, for areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the applicable limit will be higher than the baseline loan limit, FHFA said. HERA establishes the “high-cost area” limit in those areas as a multiple of the area median home value, while setting a "ceiling" at 150%  of the baseline limit, the agency said.

Median home values generally increased in high-cost areas in 2021, which increased their CLL. The new ceiling loan limit for one-unit properties will be $970,800, which is 150% of $647,200.

Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $970,800 for one-unit properties. 

Due to rising home values, the CLLs will be higher in all but four U.S. counties or county equivalents.  

Questions about the 2022 CLLs can be addressed to [email protected]

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $7.3 trillion in funding for the U.S. mortgage markets and financial institutions.

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