The Federal Housing Finance Agency makes the 2022 loan limits official
The 2022 loan limits were made official by the Federal Housing Finance Agency FHFA) in a November 30, 2021 press release.
2022 Conforming limits by unit count
As you can see, the more units, the higher limit gets.
These limits apply to ALL conventional loans.
Loan limits only apply to VA loans with an applicant with partial entitlement. The one-unit figure is used to calculate max loan amount.
FHA has several counties where the limit is well below the conforming amount.. You can check all FHA limits HERE
2022 High Balance Loan Limits
For areas considered to be high cost, such as most of the counties in Southern California, high balance limits are available to bridge the gap between a conforming loan and a jumbo or non conforming loan.
Just like with conforming loans. VA only uses the one-unit limit for partial entitlement loans
Check out high balance limits in your area HERE. The FHA link above will give you access to loan limits in all areas of the country.
How do these new limits benefit the consumer?
The higher limits will increase a borrower’s ability to get financing with lower down payments. What do I mean?
Let’s say that someone is applying for HomeReady program which typically only requires 3% down..
With last year’s limit of $546,250 for a 1 unit property, that potential homebuyer had a max price point of $563,144.
With the new higher limit, that same homebuyer could potentially be shopping as high as $667,216 and still be able to utilize that 3% down payment program.
For those of us in San Diego County, where the median Sales Price in October was $860,000, the increase in the limits would allow a qualified buyer to purchase up to $926,052 with as little as 5% down.
What is the difference between conforming and high balance loans?
Conforming and high balance loan have a lot of similarities, however there are some subtle differences between the two. They include higher down payment requirements on conventional loans, more restrictive Debt to Income ratio guidelines and different interest rates.
I do want to point out that these limits apply to conventional at this point. FHA is expected to adjust their loan limits in the near future.
If you are looking for a VA loan, then the limits will not apply as long as you have full entitlement. If you DO NOT have full entitlement, then use the 1 unit limits. VA loans do not make allowances for higher loan amounts based on unit count.
So, there you have it. A quick look at the 2022 Southern California Loan Limits.
If you have any questions on this topic or any other mortgage-related topic, by all means reach out to me. Send me an email Give me a call – (858) 3-LOANS-3 Text LOANINFO to 44222 Connect with me on Social Media.
Please hit the like button if you enjoyed the Article. Share it with your friends. And of course, don’t forget to subscribe.