The FHFA is raising the limit on conforming loans by 18%.
This is huge news for home buyers and sellers and is in direct response to the healthy growth in home prices over the last year.
In most of the U.S., the 2022 conforming loan limits for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.
The 2022 limit set by the Federal Housing Finance Agency will open lending options for more borrowers to qualify for loans backed by Fannie Mae and Freddie Mac. It allows for more traditional mortgage options for higher price points other than jumbo financing, according to BankSouth.
“This is the fastest increase on record,” said Jan Wagner, VP, BankSouth. “The increase is a result of significant home-price growth.”
The Housing and Economic Recovery Act (HERA) requires the baseline conforming loan limits for Sallie Mae and Freddie Mac to be adjusted each year to reflect the average U.S. home price change.
The third quarter FHFA House Price Index includes statistics for the average U.S. home value increase over the last four quarters. According to the nominal, seasonally adjusted, expanded data, house prices increased 18.05 percent, on average, between the third quarters of 2020 and 2021.
The baseline will increase by the same percentage.
The FHFA regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. The government-sponsored enterprises provide more than $7.3 trillion in funding for the U.S. mortgage markets and financial institutions.
With demand continuing to outstrip inventory, this is a welcome adjustment, ensuring homebuyers will not be priced out of the market because of increased prices.
Our partners at BankSouth are ready to help you get into your dream home. Reach out to Dorsey Alston if you are considering buying or selling a house in the new year.


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