Good News! Loan Limits INCREASED for 2021

Real Estate from the Rooftops

Hot off the press: The Federal Housing & Finance Agency is increasing the Conforming Loan Limits for 2021, and the FHA will likely follow. For buyers, this means more loan options (and more house!) with a reasonable down payment. For REALTORS® this means you’ll be able to better help your buyer pool in a market where demand is high and supply is low. Listen in as I break down the new loan limit numbers, what they mean for conforming and jumbo loans, and how to distinguish between FHFA & FHA loans —and hear why having a loan professional you can trust is paramount to getting the best loan possible.

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Time Stamped Show Notes:

• Big News: The Federal Housing & Finance Agency is changing the Conforming Loan Limits for 2021
• What does this impact?
• When loan limits increase, it means you can buy more house with a reasonable down payment and the loan is backed by the FHFA (Fannie Mae & Freddie Mac)
• The new Maximum Conforming Loan Limit for a single unit property is $548,250 from this year’s $510,400
• You can now do a 5% down payment on a purchase up to $577,100
• You don’t have to have 20% down, there are amazing loan options at 5% down; talk to your REALTOR® and loan professional to learn more about your options
• I’m getting the inside scoop from Brian Floyd, my preferred lender who’s a pro and gives personalized advice
• Information on jumbo loans
• Jumbo loans are loans for amounts larger than the conforming loan limit and the pricing number is different
• These are for luxury homes; you’ll need a higher credit score (720 and up)
• If your credit score is less, you can do a 5% down conventional but will have lower loan limits
• Jumbo loans typically require 20% down, sometimes 10%; there are some 0% doctor loans, but you’ll need reserves, great income, and great income verification
• Underwriting for jumbo loans typically takes a little longer to confirm everything
• Other loans: Sandwich loans, stacker loans, combo loans, 90-10-10, 80-10-10; all these have adjustments on pricing and a second underwriting
• Have a loan professional you can trust; there’s a lot to consider
• Announcement coming in December: FHA loan limits are likely going to increase, too, to $356,362 (they typically follow FHFA)
• Information on the FHA loans
• It’s 3.5% down, your credit score can be a bit lower, and your debt-to-income ratio can be higher, giving you more opportunities as a buyer
• If your credit score has taken a hit, ask your REALTOR® and loan professional how to boost it
• People with FHA loans get an extra inspection because the bank has more at risk; there could be some non-negotiable repairs
• FHA folks look for paint peeling, operating windows, handrails for 3 or more steps, and other safety precautions
• FHA loans serve an important part of the marketplace; buyers will have more loan options and REALTORS® will be able to better help their buyer pool

3 Key Points

1. There are great loans with 5% down. Talk to your REALTOR®!
2. Get a loan professional you can trust.
3. FHA loans are not of the devil!