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2020 Loan Limit Updates

As home prices have increased throughout the country, loan limits increased as well. Both the Federal Housing Agency (FHA) and the Federal Housing Finance Agency (FHFA) announced new loan limits in late 2019. The Veterans Administration (VA) also announced that they would eliminate their loan limit under the new Blue Water Navy Vietnam Veterans act of 2019.

Here are the changes:

New FHFA Conforming Loan Limits:

  • The maximum base conforming loan limit for single-unit properties is $510,400, a 5.38% increase from 2019’s limit of $484,350.
  • The high-cost area maximum limit for single-unit properties is $765,600, an increase from the 2019’s limit of $726,525.

The change in the loan limit reflects the increase, on average, between the third quarters of 2018 and 2019.  This is the fourth consecutive increase to the conforming loan limits. Prior to that, the conforming loan limits had remained the same for a decade (2006-2016.) For a list of the 2020 maximum loan limits for all counties and county-equivalent areas in the U.S. click here

New FHA Loan Limits:

The FHA loan limits are increasing for most counties across the U.S. Only 11 counties in the country will see a decrease in their loan limits.

FHA loan limits are determined by the median home prices in each county.

  • The new floor (limit for low-cost areas) FHA limit is $331,760, a nearly $17,000 increase from last year’s base limit of $314,827
  • The new ceiling (limit for high-cost areas) FHA limit is $765,600, a nearly $40,000 increase over last year’s ceiling limit of $765, 525.

There are a number of counties whose limits sit in-between the floor and ceiling loan limits. The loan limit increased in 2020 for 3,503 counties. Compare that to an increase for only 188 counties in 2016.

To read FHA’s full breakdown of all the 2020 loan limits, click here.

 

Changes to the VA Loan:

The VA Loan Limit has been eliminated under the Blue Water Navy Vietnam Veterans Act of 2019, meaning that those eligible may borrow more money for their home purchase without making a down payment.

While this means that active-duty members, reservists, and veterans can buy a more expensive home with nothing down, they must still prove that they reach the minimum credit requirements, have enough income to comfortably make the minimum payments, and that the homes appraised value matches the purchase price.

Under prior rules, borrowers eligible for a Jumbo VA Loan could still borrow over the $484,350 limit (or up to $726,525 in high-cost areas), however, they were required to make a down payment of 25% of the amount borrowed over the limit.

The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. This is not a commitment to lend.


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