Mortgage giants Fannie Mae and Freddie Mac will raise the limits of government-backed loans to a record level for 2023, according to the Federal Housing Finance Agency announced Tuesday.
Baseline conforming loan limit for 2023 will increase to $726,200, up $79,000 from this year’s limit of $647,200.
Higher-cost areas such as regions of California and New York will have a 2023 loan limit of $1,089,300, up from $970,800 in 2022.
Mortgages above these loan limits are considered “non-conforming” or “jumbo” mortgages, and typically come with higher interest rates.
Conforming loans generally come with lower closing costs and can require a smaller down payment than mortgages that exceed the limit, known as jumbo mortgages.
The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac (conforming loan) limits will rise to $1,089,300 in 2023 in high-cost markets, such as parts of California and New York, from $970,800 this year.
However, in most parts of the US, loan limits will rise to $726,200 from a 2022 maximum of $647,200. By law, loan limits are calculated annually using a formula that factors in average housing prices.
Conforming loans generally come with lower closing costs and can require a smaller down payment than mortgages that exceed the limit, known as jumbo mortgages.
Cobalt PacWest | CPAs & Advisors
Natalie C. Papagni, CPA
Principal & Tax Strategist
3000 El Camino Real, Bld 4, Suite 200
Palo Alto, CA 94306
650.930.9562 | 877.223.5678
npapagni@cobaltpacwestadvisors.com