2017 Conventional Loan Limits Increase

Conventional Loan Limit Increases - 2017

Conventional Loan Limit Increases – 2017

Since this post Conventional Loan Limits have been increased to $453,100 effective January 1, 2018

Fannie Mae has increased the max Conventional Loan limit for 2017.  This is the first Conventional loan limit increase since 2006. As of January 1, 2017 the maximum allowable Conventional loan limit for Fannie Mae Conventional will be $424,100. (up from $417,000)

Check out Fannie Mae’s Max Loan Amount Report.  The most common Maximum Conventional loan amount is $424,100.   This is the limit that used to be $417,000 and it now represents the maximum Conventional Home Loan limit in non-high cost regions of the United States.  Learn more from Fannie Mae about the increase

2017 Conventional Loan Limit Increase

2017 Conventional Loan Limit Increase









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Loan Limit Increase Signals Tone More Than Anything

The primary takeaway here is not that Conventional loan limits increased by $7,100 in 2017.  The bigger news is what this reveals about Fannie Mae’s tone about housing and lending.  Then, by extension what this means for FHA, VA and more as those investors tend to follow Fannie’s lead (VA max loan amount adjusts directly with Fannie).

This is the first base maximum loan increase by Fannie since 2006.  However, take a look at the frequency in which loan amount limits were increased prior to 2006:

2000 – $252,700
2001 – $275,000
2002 – $300,700
2003 – $322,700
2004 – $333,700
2005 – 359,650
2006 – $417,000
2007 through 2016 – no change
2017 – $424,100

Common sense reveals that home values decreased post 2006 and that was partly behind the stall in limit hikes.  However, in Q1 of 2016 the average home value in the US per Zillow was $230,300.  As of Q2 2016 the average home price is at $186,000.  The Conventional loan limit increase shows Fannie is bullish on home values.  Especially since they did so before we even got back to the $230k mark that justified the last base max loan limit increase.

Shortly after this post, FHA also increase their 2017 maximum loan amount.

By Jeremy House


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