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Mortgage Loan Limits Largely Rise In 2022

Kevin Graham4-minute read

June 06, 2022

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Loan limits for most mortgages are increasing in 2022. An announcement from the Federal Housing Finance Agency (FHFA) in recent days has confirmed the maximum loan amounts for mortgages across the country in the coming year.

We’ll go over what the new limits are and what this means for home buyers or those looking to refinance.

Understanding The Loan Limit Changes

There are three types of loans impacted by changes to mortgage limits that are either in effect now or will be at the beginning of 2022. Let’s run through them.

Conventional Loan Limits

Baseline conventional loan limits (also known as conforming loan limits) for 2022 increased 18.05%, rising $98,950 to $647,200 for 1-unit properties. Limits were also generally higher in high-cost areas, defined as those in which 115% of the local median home value is higher than the baseline conforming loan limit.

In high-cost areas, limits are set on a county-by-county basis The absolute highest amount that can be paid for a 1-unit property in high-cost areas is $970,800, which represents 150% of the national baseline limit. This high-cost ceiling is also the loan limit for all conventional loans in Alaska and Hawaii.

A home with up to 4 units is considered a single-family property and is available under standard mortgage financing programs. The limits are higher depending on the number of units you’re buying. See the table below.

Conventional Loan Limits

Number of Units

Continental U.S.

Alaska and Hawaii

1

$647,200

$970,800

2

$828,700

$1,243,050

3

$1,001,650

$1,502,475

4

$1,244,850

$1,803,000

These limits apply immediately to loans backed by the government-sponsored enterprises Fannie Mae and Freddie Mac. Rocket Mortgage® clients don’t need to wait for 2022.

If you’re looking to find the limits in your area, the Department of Housing and Urban Development has a mortgage limits search engine. Although ostensibly for FHA mortgage limits, you can select “Fannie/Freddie” under limit type. To see the limits for next year, be sure to also select “CY2022” for the limit year.

VA Loan Limits

Under normal circumstances, VA loans don’t have loan limits. In the event that you default on the loan, the VA insures the same percentage of the mortgage for lenders regardless of the loan amount.

However, there are a couple of instances where loan limits do come into play. Where that’s the case, the limits listed above apply.

You might have a loan limit if you have what’s called impacted entitlement. In this case, part of your veteran benefit from the VA is shown as used up. You may have this if you have a VA loan that hasn’t been fully paid back or if you had a foreclosure that you haven’t paid the VA back for, for example.

If lenders think that a loan is large enough that it presents a slightly higher risk, they may also have different qualification requirements. While there’s no specific loan amount at which these VA jumbo loans start, many lenders including Rocket Mortgage use anything above conforming loan limits in the area as a guide. At Rocket Mortgage, you can get a VA jumbo loan for up to $2 million if you qualify.

Find out if a Jumbo loan is right for you.

See rates, requirements and benefits.

FHA Loan Limits

FHA loan limits are updated at the beginning of each calendar year. Below we've listed the minimum and maximum loan amounts on a national level for residential properties with up to 4 units.

Before looking at these, it’s important to note how the limits on FHA mortgages work. The absolute lowest your own loan limit can be is 65% of the national conforming loan limit, which for a 1-unit property in 2022 is $420,680. However, loan limits are set entirely at the county level, so in many areas it’s going to be higher. Alaska and Hawaii fall at the national ceiling, which for 1-unit properties is $970,800.

2021 FHA Loan Limits

Number of Units

Loan Limit Floor

Ceiling in Alaska, Hawaii and High-Cost States

1

$420,680

$970,800

2

$538,650

$1,053,000

3

$651,050

$1,502,475

4

$809,150

$1,867,275

Why Loan Limits Matter

The conforming loan limit in your area is important because amounts above conforming loan limits represent jumbo loans. While a Jumbo Smart loan from Rocket Mortgage has several benefits as compared to the jumbo loan options offered by other lenders, including a lower down payment requirement and no required mortgage insurance, you’ll still have to meet stricter qualification standards than you would on a conforming loan.

Additionally, you may be able to get a lower rate on a conforming loan than you could on a jumbo loan because investors may be looking to be compensated for the increased risk of a bigger loan amount. It should be noted that this isn’t always the case and it depends heavily on investor appetite in the market at any given moment.

The Bottom Line

Loan limits that have generally gone up across the country mean that people should be able to afford more home without having to deal with the additional qualification requirements necessary to get a jumbo loan. With loan limits up more than 18% for a conventional loan, this represents a major increase in your purchasing power.

If you’re interested in checking out your loan options, you can apply online or give us a call at (833) 326-6018.

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Kevin Graham

Kevin Graham is a Senior Blog Writer for Rocket Companies. He specializes in economics, mortgage qualification and personal finance topics. As someone with cerebral palsy spastic quadriplegia that requires the use of a wheelchair, he also takes on articles around modifying your home for physical challenges and smart home tech. Kevin has a BA in Journalism from Oakland University. Prior to joining Rocket Mortgage, he freelanced for various newspapers in the Metro Detroit area.